1. Ralph has just borrowed 1360 dollars to purchase a new stereo, at a nominal rate of interest of 11.6 percent convertible monthly. Although he is charged interest from the moment he borrows the money, the first payment is not due for 9 months. If he will make 24 monthly payments, how much interest is in the 17th payment?
Answer = dollars. (3 decimal place)
2. Suppose that an annuity will make 13 annual payments, starting with 1740 dollars and increasing by 4 percent each year. If the effective rate of interest is 7.3 percent, what is the present value of the annuity 5 years before the first payment?
Answer = dollars. (3 decimal place)