Quantitative Problem: Bank 1 lends funds at a nominal rate of 6% with payments to be made semiannually. Bank 2 requires payments to be made quarterly. If Bank 2 would like to charge the same effective annual rate as Bank 1, what nominal interest rate will they charge their customers? Round your answer to three decimal places. Do not round intermediate calculations.
%
Quantitative Problem: You need $16,000 to purchase a used car. Your wealthy uncle is willing to lend you the money as an amortized loan. He would like you to make annual payments for 6 years, with the first payment to be made one year from today. He requires a 6% annual return.
What will be your annual loan payments? Round your answer to the nearest cent. Do not round intermediate calculations.
$
How much of your first payment will be applied to interest and to principal repayment? Round your answer to the nearest cent. Do not round intermediate calculations.
Interest: $
Principal repayment: $
Problem
Finding the required interest rate
Your parents will retire in 16 years. They currently have $360,000 saved, and they think they will need $1,500,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer to two decimal places.
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Problem
Time to reach a financial goal
You have $71,961.86 in a brokerage account, and you plan to deposit an additional $3,000 at the end of every future year until your account totals $290,000. You expect to earn 10% annually on the account. How many years will it take to reach your goal? Round your answer to two decimal places at the end of the calculations.
years