Homework Answers
(2) APR = 12 % , Payment Frequency: 5 times per annum, Periodic Rate = 12 / 5 = 2.4 %
Effective Rate = (1.024)^(5) - 1 = 0.1259 or 12.59 %
Periodic Payouts = $ 3000 and Tenure = 6 years or (5 x 6) = 30 periods
Therefore, 3000 x (1.024)^(29) +................+ 3000 = 3000 x [{(1.024)^(30)-1}/{(1.024)-1}] = $ 129629.497 ~ $ 129629.5
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