Question
Asked Jan 23, 2020
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compute the periodic rate and intrest in the first period for a $2,600 loan with 8.5% APR for the following periods. 

a. Monthly

b. Daily (use a non leap year)

c. quarterly (4 times a year)

d. biweekly (every 2 weeks) 

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Expert Answer

Step 1

a. Monthly:

 

APR = 8.5%

Number of Months in a Year = 12

 

The calculation of the monthly periodic rate is as follows:

Finance homework question answer, step 1, image 1
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Step 2

Loan Amount = $2,600

Monthly Periodic Rate = 0.70833333%

 

The calculation of the interest amount in the first period is as follows:

Finance homework question answer, step 2, image 1
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Step 3

b. Daily (Using non leap year):

 

APR = 8.5%

Number of Days in a Non-Leap Year = 365

 

...

Finance homework question answer, step 3, image 1
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