4. A personal loan of $1,000 is made for a period of 18 months at an interest rate of 1.50% per month on the unpaid balance.

4. A personal loan of $1,000 is made for a period of 18 months at an interest rate of 1.50% per month on the unpaid balance. If the entire amount owed is repaid in a lump sum at the end of that time, determine: a) The effective annual interest rate b) The total amount of interest paid

5. What nominal interest, compounded quarterly, is required to provide a 6% annual effective interest rate? A 12 % annual effective interest rate?

6. How long will it take for $1 to double in value (disregarding any change in the buying power of the dollar) if:

a) The interest rate is 10% compounded annually?

b) The interest rate is 10% compounded semiannually?

c) The interest rate is 10% ordinary simple interest?

Expert Solution

jeff jeffy answered 1 year ago

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