Question

1.An investment will quadruple your money in 12 years. What is the nominal rate of interest convertible quarterly?

Answer = % (3 Sig Fig)

2.AJ takes out a small business loan of $15000 at a nominal rate
of interest of 10.6% convertible quarterly. One year later, he
repays $ 3500. Two years after that, the bank wants to sell AJ's
loan to another institution. How much does AJ owe at that
time?

Answer = dollars. (3 Sig Fig)

Answer #1

1)

Effective annual rate is 12.25%

APR = [(1+EAR)^(1÷n)-1]×n | |||

n is number of compounding per year | |||

Quarterly compounding |
11.72% |
((1+12.25%)^(1/4)-1)*4 |

**Hence, Nominal rate of interest convertible quarterly is
11.72%**

1. What nominal rate compounded annually would
quadruple the principal in 4
years?
2. A master card compounds monthly and charges an interest of 1.5%
per month.
What is the effective interest rate per year?
3. How long will it take money to triple itself if invested at 8%
compounded
annually?
4. Microsoft CEO, billionaire Bill Gates willed that a sum of $25
million be given to a
child but will be held in trust by the child’s mother until...

An investment promises to quadruple your money in nine years. If
the interest is compounded monthly, what effective annual rate
would you earn? (Hint: Calculate the monthly rate and convert that
to the effective annual rate, EAR.) A. 25.99% B. 16.65% C. 18.92%
D. 21.90% E. 31.95% F. 41.42%

Investment X for 100, 000 is invested at a nominal rate of
interest, j, convertible semiannually. After four years, it
accumulates to 214, 358.88.
Investment Y for 100, 000 is invested at a nominal rate of
discount, k, convertible quarterly. After two years, it accumulates
to 232, 305.73.
Investment Z for 100, 000 is invested at an annual effective rate
of interest equal to j in year one and an annual effective
effective rate of discount equal to k in...

What is the nominal annual rate of interest compounded quarterly
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$2000 made at the end of every six months?

At
what nominal rate of interest compounded quarterly will $2000.00
earn $400.00 interest in three years?

5) What is the effective annual interest rate for a loan with a
nominal annual interest rate of 12% if compounded:
semi-annually. Answer ____________________
monthly. Answer _________________________
continuously. Answer _____________________
6) You make a series of quarterly deposits every quarter
starting at the end Quarter 1 and ending at the end of Quarter 36.
The first deposit is $1,100, and each deposit increases by $500
each Quarter. The nominal annual interest rate is 7%, and is
compounded continuously. What is...

Your bank account pays a 12 percent nominal rate of interest.
The interest is compounded quarterly. Which of the following
statements is most correct?
A.
The periodic rate of interest is 4 percent and the effective
rate of interest is greater than 12 percent.
B.
The periodic rate of interest is 3 percent and the effective
rate of interest is 12 percent.
C.
The periodic rate of interest is 3 percent and the effective
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You invest $8,000 now and get $10,000 back in 8 years.
(A) What nominal interest rate convertible every four months did
you earn?
(B) What nominal discount rate compounded monthly did you
earn?
(C) What annual effective rate of discount did you earn?

what monthly compounding nominal interest rate is
earned on an investment that doubles in 8 years?

a. The effective interest
rate is 21.44%. If there are 12 compounding periods per year, what
is the nominal interest rate?
b. What is the effective interest
rate on a continuously compounded loan that has a nominal interest
rate of 25%?
c. Which is the better
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d. Money invested at 6% per year,
compounded monthly. How money months you need to triple your
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