Question 1
a. Use Goal seek to solve the question in a spreadsheet. Make sure you carefully document the steps you used in the spreadsheet.
b. Use Solver to solve the question in a spreadsheet. Make sure you carefully document the steps you used in the spreadsheet.
Next, develop an e?ective interest rate calculator.
c. The calculator you develop should satisfy the following speci?cations.
- In the top cell the user enters the percentage nominal rate (like 7%).
- In the next cell the user enters the annual frequency of the nominal rate, i.e., the n from jn.
- In the next cell the spreadsheet calculates the effective daily rate of interest. (Assume 365 days in a year.)
- In the next cell the spreadsheet calculates the effective weekly rate of interest. (Assume 52 weeks in a year.)
- In the next cell the spreadsheet calculates the effective monthly rate of interest.
- In the next cell the spreadsheet calculates the effective quarterly rate of interest.
- In the next cell the spreadsheet calculates the effective half yearly rate of interest.
- In the next cell the spreadsheet calculates the effective annual rate of interest.
Graph your results, displaying the log interest rate1 on the vertical axis and the nominal, then effective rates, on the horizontal axis (in the order given above).
Present your answers to the above questions in a spreadsheet, giving each solution on a separate sheet (labelled 'Part a', 'Part b', and 'Part c'). Your spreadsheet should be clearly labelled and easy to understand. Make sure you identify what the "inputs" and "outputs" are.