Question

1. (5 Points) Andrew knows that he will need $35,000 for a down payment on a house in five years. At a 6% nominal interest rate, compounded monthly, the interest rate per period is closest to: a. Less than 0.25% b. About 0.50% c. About 6.00% d. More than 6.16%. 2. (5 Points) Anthony graduates and ships out. He invests his entire first paycheck of $11,500 in an account that returns 3.3% annually. How long until the value doubles? a. About 13 years or less b. About 16.5 years c. About 19 years d. About 22 years or more la 3. (5 Points) The other Anthony puts $20,000 down on an apartment costing $120,000. At a nominal mortgage rate of 3% for 10 years, compounded monthly, what is the monthly payment? a. About $965. b. About $1,060. c. About $6,100. d. More than $15,000. 4. (5 Points) Luis has been offered a car loan at 4% nominal interest, com- pounded monthly. What is the effective annual interest rate? a. 0.333% b. 0.500% C. 4.070% d. 6.170%

Answer 1

a rust we will present value for calculate $3soro By using formula, Carn get $26154 we will Now, using formula of compor interest compounded monthly interest rate per period wie be SAT 12 x 5 35070, 26154fit in (1.3387860 Cittaa) 1.0047-1= 2 120 SUN 12 M T W T 1 2 6 7 8 9 13 14 15 16 20 21 22 23 F 3 10 17 24 S S 4 5 11 12 18 19 25 26 102 5:64% 7 Answer is ophon (C)

FEBRUARY 20 ΛΟΝ 13 6 WK 07 044-321) _23000 ? 11500 ( 1+ 3.3.)" - 2 = ( 1+ 3.3 ) = 2 = (1.033) Usung log both sides, na log 2 o log 1.033 na 21.34 %s. Answer is option (d) TUE 11 C P $120000 - $20000 14 P ² $ Icoaro Using formula, r(lton A 2 P 2 WK 07 (045-320) we will get the monthly payment of $965.615 Auswer is option (a) 12 ( 14 ) , > (1+004) d) 1 2 9 16 23 3 10 17 24 4 11 18 25 5 6 7 12 13 14 19 20 21 26 27 28 JAN-20 i=0.040742 4.0742% Iz