Change compounding to bi-monthly

Reference no: EM13790972

Assignment 1:

Assume that you just received an ordinary annuity with 6 annual payments of $4,000 each. You plan to invest the payments at a 5% interest rate. What will the value of the payments be at the end of the 6th year?
Suppose it is January 1st and you deposited $3,000 in a savings account that pays 9 percent with daily compounding and a 360-day year. How much could you withdraw after nine months, assuming this is nine-twelfths of a year?

Assignment 2:

Assume a bank charges a 15.5% APR (annual percentage rate) on credit card holder compounds quarterly. What EAR (effective annual rate) is the bank is charging? What if they change compounding to bi-monthly? Compare the result from the bank perspective and the credit card holder perspective (your calculation should be set to 4 decimal places).

Assignment 3:

Determine the annual payment, and
Prepare an amortization schedule based on the following information. Utilize the example provided in the text as well to see the end result:

Loan amount = $25,000
Annual Interest rate = 6% compounded annually.
The loan matures or the loan term = 5 years
You must include all the six categories (year, beginning balance, payment, interest, principal, and balance)

Reference no: EM13790972

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Change compounding to bi-monthly : Assume a bank charges a 15.5% APR (annual percentage rate) on credit card holder compounds quarterly. What EAR (effective annual rate) is the bank is charging? What if they change compounding to bi-monthly? Compare the result from the bank perspec..

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