Problem
1. An outright purchase of $20,000 now (a lumpsum payment) can be traded for 24 equal payments of $941.47 per month, starting one month from now. What is the monthly interest rate that establishes equivalence between these two payment plans?
2. Compute the effective annual interest rate in each of the following situations.
a. 5.75% nominal interest, compounded quarterly.
b. 5.75% nominal interest, compounded daily.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.