Question

please answer 16,18 and 20

no pictures answers

borrowers? Explain Calculating Future Val assuming an interes Calculating Fu compounded daily on What is the an uninformed beport to potential The bank uses daily compound u is the bank required by law to report to potential Explain why this rate is misleading to an uninformed borrower Future Values (LOI) What is the future value of 53.100 in 17 years interest rate of 8.4 percent compounded semiannually? Future Values (L01 Spartan Credit Bank is offering 8.1 percent 2 nded daily on its savings accounts. If you deposit $6,500 today, how much have in the account in S years? In 10 years? In 20 years ing Present Values (LOI) An investment will pay you 580,000 in If the appropriate discount rate is 9 percent compounded daily, what is the 17. 350 per year the required re value be if the lues Lon.compou puture med boronto pertem nes accountanced semi e orsz. ay in exchange 18. Calculating Prese 10 years. If the appropria present value? 19. EAR versus versus APR 11.04) Big Dom's Pawn Shop charges an interest rate of 27 per per month on loans to its customers. Like all lenders, Big Dom must report an APR to consumers. What rate should the shop report? What is the effective annual rate? 547,000 in an on database. If the savings? of each of the will you have for 40 years? ar savings ac osits into the Calculating Loan Payments (102, 4 You want to buy a new sports coupe for $84.500, and the finance office at the dealership has quoted you an APR of 5.2 per cent for a 60-month loan to buy the car. What will your monthly payments be? What is the effective annual rate on this loan? Calculating Number of Periods (L03] One of your customers is delinquent on 21. han www .LT

Answer 1

16. r= 8.4/2 = 4.2%

n= 17×2 = 34

Future Value = 3100 (1.042)^34

=3100×4.05044

= $12,556 (Approx)

18. Time period = 10×365= 3650

Rate = 0.09/365 = 0.000246

Present Value = 80000/(1+.0002465)^3650

= $32,529 (Approx)

20. For the monthly payment, r= 0.052/12 = 0.00433

Monthly payment = 84500/ PVAF(r=0.00433,n=60)

= 84500/[(1) - {1/(1.00433)^60}]/0.00433

Monthly payment = $1603(Approx)

Effective Annual Rate of this loan= (1+r)^n -1

=(1.00433)^12 - 1 = 5.32%