Calculating Annuity Present Value, EPR & Annual Percentage Rate (APR).
1. Calculating Present Values An investment will pay you $45.000 in six years. If the appropriate discount rate is 11 percent compounded daily, what is the present value?
2. EAR versus APR Big Dom's Pawn Shop charges an interest rate of 25 percent per month on loans to its customers. Like all lenders, Big Dom must report an APR to consumers. What rate should the shop report? What is the effective annual rate?
3. Calculating Loan Payments You want to buy a new sports coupe for $61,800, and the finance office at the dealership has quoted you a 7.4 percent APR loan for 60 months to buy the car. What will your monthly payments be? What is the effective annual rate on this loan?