m r ia = (1 + )" - 1 18 m PART A.) Find the effective annual interest rate for a credit card that lists an APR of 18% compounded monthly. PART B.) An engineer who is saving for a new house plans on saving $100 per paycheck towards the down payment on the house. If she gets paid bi-weekly (twice per month), and s is depositing this money into a savings account that earns 5% annual interest, compounded monthly, how much money does she have saved up after 4 years? Assume that there is no inter-period interest. PART C.) The cost of replacing part of a cell phone video chip production line in 6 years is estimated to be $500,000. At an interest rate of 10% per year, compounded quarterly, the uniform amount that must be deposited every 3 months is?

m r ia = (1 + )" - 1 18 m PART A.) Find the effective annual interest rate for a credit card that lists an APR of 18% compounded monthly. PART B.) An engineer who is saving for a new house plans on saving $100 per paycheck towards the down payment on the house. If she gets paid bi-weekly (twice per month), and s is depositing this money into a savings account that earns 5% annual interest, compounded monthly, how much money does she have saved up after 4 years? Assume that there is no inter-period interest. PART C.) The cost of replacing part of a cell phone video chip production line in 6 years is estimated to be $500,000. At an interest rate of 10% per year, compounded quarterly, the uniform amount that must be deposited every 3 months is?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 2STP

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