Response to the following questions:
1. If interest is paid at a rate of 5% per quarter, what is the:
a. annual percentage rate?
b. effective annual rate?
2. L. Shark is willing to lend you $10,000 for three months. At the end of six months, L. Shark requires you to repay the $10,000, plus 50%.
a. What is the length of the compounding period?
b. What is the rate of interest per compounding period?
c. What is the annual percentage rate associated with L. Shark's lending activities?
d. What is the effective annual rate of interest associated with L. Shark's lending activities?