1. Effective Annual Rate
A loan is offered with monthly payments and a 8.50 percent APR. What’s the loan’s effective annual rate (EAR)? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Effective annual rate = %
2. Future Value
Given a 5 percent interest rate, compute the year 6 future value of deposits made in years 1, 2, 3, and 4 of $1,650, $1,850, $1,850, and $2,150, respectively. (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Future value =
3. Future Value of Multiple Annuities
Assume that you contribute $300 per month to a retirement plan for 15 years. Then you are able to increase the contribution to $600 per month for another 25 years. Given a 6.0 percent interest rate, what is the value of your retirement plan after the 40 years? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Future value of multiple annuities =
4. Present Value
You are looking to buy a car. You can afford $520 in monthly payments for four years. In addition to the loan, you can make a $1,700 down payment. If interest rates are 8.75 percent APR, what price of car can you afford (loan plus down payment)? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Present Value =