Please provide step by step solutions to these problems and not just the answer.
Only up to #23 is needed.
Q16) Effectively rate of interest = (1 + stated interest rate/number of compounding periods)^ number of years - 1
Effectively rate of interest = (1+ (0.06/4))^(4*1) - 1 = 1.06136 - 1 = 0.06136 or 6.136%
Q17) Present Value = Future Value/(1+(r%/4))^(4*number of years)
Present Value = 41413/(1+(4.5%/4))^(4*5)
(note: we divide the rate of interest by 4 because we have to do compounding Quartly and multiply 1 by no of year because the period now increase)
Present Value = 41413/(1+(4.5%/4))^(4*5) = 41413/(1.01125)^20 = 41413/1.2507 = 33,111.85
Q18) EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
where P stands for the loan amount or principal, R is the interest rate per month and N is the number of monthly instalments
EMI = [22000 x (3.5%/12) x (1+3.5%/12)^36]/[(1+3.5%/12)^36 -1]
EMI = 71.26/0.1105 = $644.88
Q19) Future Value = Present Value*(1+(r%/4))^(4*number of years)
Future Value = $4.2 million *(1+(5.4%/4))^(4*5) = $4.2*(0.0135)^20 = $4.2*(1.3076) = $5.492 million
(note: we divide the rate of interest by 4 because we have to do compounding Quartly and multiply 1 by no of year because the period now increase)
Please provide step by step solutions to these problems and not just the answer. Only up...
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