1. You borrowed $20,000 from a local bank at 12% annual rate one year ago under the condition that you make equal quarterly payments over a five year period. Today, you made the fourth payment. What should be the balance of the loan after this payment?
2. Ackerman Co. has 11 percent coupon bonds on the market with twelve years left to maturity. The bonds make annual payments. If the bond currently sells for $1,293.92, what is its YTM? Assume a par value of $1,000.
3. Friendly Quick Loans Inc. offers you 6.50 today but you must repay 8.35 when you get your paycheck in one week (or else). What is the effective annual return Friendly earns on this lending business.