After reviewing the compounding model your kindergartener has a follow-up question about effective annual rates. She figures with more frequent compounding the effective annual rate cannot be 3% for all the compounding options. Calculate the effective annual rate for each of the compounding options using a function. Round three decimal places. Annual at 3% Semi-annual at 3.022% Quarterly at 3.034% Monthly at 3.042%

A financial planning service offers a college savings program. The plan calls for you to make six annual payments of $16,300 each, with the first payment occurring today on your child's 12th birthday. Beginning on your child's 18th birthday, the plan will provide $32,000 per year for four years. What return is this investment offering? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Suppose you are considering taking consumer loan from bank for one year. Usually, for short-term loans, the bank offers 8 percent interest that compounds annually. Your credit application has been viewed by a few banks and two of them replied; Bank ALFA offers you a loan at 8 percent annual rate-interest payment by the end of year, and Bank BETA offers a loan with the same annual interest rate, but interest payment is 2 percent by the end of each quarter. Which loan do you prefer? Why?

NOTE: Provide a format and show your work (example: N = 6, PV = XXX, I = X%, etc.) 1. Sam decides to start saving for retirement and she starts making $165 monthly contributions today and continue them for four years. What will Sam have at the end of the period if the compounding rate is 11.00 percent APR? (Do not round intermediate calculations and round your final answer to 2 decimal places.) 2.What annual rate of return is earned on a $5,000 investment made in year 4 when it grows to $11,000 by the end of year 10?  (Hint. Construct a timeline.  Do not round intermediate calculations and round your final answer to 2 decimal places.) 3. Given an 8 percent interest rate, compute the present value of payments made in years 0, 1, 2, 3, and 4 of $1,500, $1,600, $1,200, and $1,600, respectively. Compute using NPV.

Max bought some furniture for his new apartment. Macy's offered him the opportunity to "borrow" the funds using an add-on rate of 8% for 5 years. Payments will be fixed, and payable monthly. The furniture costs $5,250. What is the APR (using the n-ratio formula)?

You volunteer on a local fire department and are asked to help in the purchase of a new fire engine. You seek out a loan from a bank in which they state the annual interest on the loan would be 10%. However, the interest compounds once per quarter. What is the effective annual percentage rate (APR) if you select this loan?     10.38%     10%     15.1%     1.11%

Suppose you are considering taking consumer loan from bank for one year. Usually, for short-term loans, the bank offers 8 percent interest that compounds annually. Your credit application has been viewed by a few banks and two of them replied; Bank ALFA offers you a loan at 8 percent annual rate-interest payment by the end of year, and Bank BETA offers a loan with the same annual interest rate, but interest payment is 2 percent by the end of each quarter. Which loan do you prefer? Why?   Sadia Corporation, based in UAE, produces meat and milk products. The company sold old machinery for 50,000 UAE dirham and decided to put this amount in a term deposit, which usually pays 5 percent annually. A. Calculate the amount of money that Sadia Corporation will receive after 2, 4, and 7 years of deposit. B. Re-calculate results from part (a) if bank offers 5 percent annual compound interest on semi-annual basis. C. Re-calculate results from part (a) if bank offers 5 percent annual simple…

Suppose you are considering taking consumer loan from bank for one year. Usually, for short-term loans, the bank offers 8 percent interest that compounds annually. Your credit application has been viewed by a few banks and two of them replied; Bank ALFA offers you a loan at 8 percent annual rate-interest payment by the end of year, and Bank BETA offers a loan with the same annual interest rate, but interest payment is 2 percent by the end of each quarter. Which loan do you prefer? Why?       Sadia Corporation, based in UAE, produces meat and milk products. The company sold old machinery for 50,000 UAE dirham and decided to put this amount in a term deposit, which usually pays 5 percent annually. A) Calculate the amount of money that Sadia Corporation will receive after 2, 4, and 7 years of deposit. B) Re-calculate results from part (a) if bank offers 5 percent annual compound interest on semi-annual basis. C) Re-calculate results from part (a) if bank offers 5 percent annual simple…

Kimberly Jensen of Storm Lake, Iowa, wants to buy some living room furniture for her new apartment. A local store offered credit at an APR of 16 percent, with a maximum term of four years. The furniture she wishes to purchase costs $3,600, with no down payment required. Using Table 7-2 or the Garman/Forgue companion website, make the following calculations (round all intermediate calculations to two decimal places): What is the amount of the monthly payment if she borrowed for four years? Round your answer to the nearest cent.

The manager of Steve’s Audio has approved Daisy’s application for 24 months of credit at maximum monthly payments of $45. If the annual percentage rate (APR) is 19.2 percent, what is the maximum initial purchase that Daisy can buy on credit?  Can the calculator and excel solution be provided?