1. Suppose you deposit $125 into a bank, earning 2.5% interest. How much money would you...

1. Suppose you deposit $125 into a bank, earning 2.5% interest. How much money would you have after 1 year?

2. You expect to have $1,000 in 1 year. A bank is offering loans at 6.4% interest per year. How much can you borrow today if you plan to use this money to repay the loan? Round to the near whole cent.

3. What is the discount factor that is equivalent to a 6.2% discount rate? Round to 4 decimal places.

4. Given a discount factor of .9390, what is the interest rate? Round to 2 decimals.

Expert Solution

jeff jeffy answered 1 year ago

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