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1. A bank charges 1.5% per month on a loan. Find the equivalent nominal rate of interest. 2. A financing company charges 1.5% per month on a loan. Find the equivalent effective rate of interest. 3. A nominal rate of 12% compounded monthly is equal to an effective rate of interest. 4. Convert 16% compounded semi-annually to equivalent nominal rate which is compounded daily. 5. Find the accumulated amount of P 1000 after 5 years when deposited in a bank at a rate of 16% compounded monthly.

1. A bank charges 1.5% per month on a loan. Find the equivalent nominal rate of interest. 2. A financing company charges 1.5% per month on a loan. Find the equivalent effective rate of interest. 3. A nominal rate of 12% compounded monthly is equal to an effective rate of interest. 4. Convert 16% compounded semi-annually to equivalent nominal rate which is compounded daily. 5. Find the accumulated amount of P 1000 after 5 years when deposited in a bank at a rate of 16% compounded monthly.

Intermediate Financial Management (MindTap Course List)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter22: Providing And Obtaining Credit
Section: Chapter Questions
Problem 4P: Gifts Galore Inc. borrowed 1.5 million from National City Bank. The loan was made at a simple annual...
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1. A bank charges 1.5% per month on a loan. Find the equivalent nominal rate of interest. 2. A financing company charges 1.5% per month on a loan. Find the equivalent effective rate of interest. 3. A nominal rate of 12% compounded monthly is equal to an effective rate of interest. 4. Convert 16% compounded semi-annually to equivalent nominal rate which is compounded daily. 5. Find the accumulated amount of P 1000 after 5 years when deposited in a bank at a rate of 16% compounded monthly.
Transcribed Image Text:1. A bank charges 1.5% per month on a loan. Find the equivalent nominal rate of interest. 2. A financing company charges 1.5% per month on a loan. Find the equivalent effective rate of interest. 3. A nominal rate of 12% compounded monthly is equal to an effective rate of interest. 4. Convert 16% compounded semi-annually to equivalent nominal rate which is compounded daily. 5. Find the accumulated amount of P 1000 after 5 years when deposited in a bank at a rate of 16% compounded monthly.
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