Question

d0. What is the nominal annual rate of interest compounded quarterly if a loan of $21,500 is paid in seven years by payments of $2,000 made at the end of every six months?

Answer 1

$ Initial amount or principal (P) - $ 24, 500 Since $2000 is foid et every six months so amount foid after 7 years (A)= - $2000 X 2X 7 - $ 28,000 Also onnul nominal rate is by formule where A = 84 Annual nominal site nt period of colculation of interest Ny total, time feriad N p (1+r n 4X7 28000 interest 21500 Istr H {": n=4 quaterly ito be colculated} 28 1) 28000 21 500 - 1 elo 4 {(1-3004 -1} ar 4(1.011 - 1) = 4x-oll . 044 So is 0.04H the paid eat the ennud sote interest the supired vidue of connuel nominal site of given this sete quaterly for connuel nominal site of interest principal of $ 24,500 which where 8 0.044 is nominal is of