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Answer All Questions 1. A merchant borowed 15MID from a bank whichis to be repaidto bankthrough 10 years by semiannual instal

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Answer #1

Question 1. We assume 15 MID to be 15 million dollars meaning 15,000,000

Case (1)

PV =15,000,000

NPER = 10*2 = 20

RATE = (1+0.12)^(1/2) -1 = 0.0583

So, Semi annual installment =PMT(RATE,NPER,PV) =PMT(0.0583,20,15000000) = $1,289,783.70 = 1.29 MID

Case (2)

PV =15,000,000

NPER = 10*2 = 20

RATE = 0/12.2 = 0.06

So, Semi annual installment =PMT(RATE,NPER,PV) =PMT(0.06,20,15000000) = $1,307,768.35 = 1.31MID

Case (3)

PV =15,000,000

NPER = 10*2 = 20

RATE = ((1+0.12/12)^12 -1)/2 = 0.0634

So, Semi annual installment =PMT(RATE,NPER,PV) =PMT(0.0634,20,15000000) = $1,344,228.69 = 1.34MID

Note: We have answered one full question with all sub-parts. Please post the other question separately as only one full question will be answered at a time

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