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Determine the interest rate you will pay

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Reference no: EM133121401

Question - Present value, future value and interest rate -

1. Jose Lopez has $15,000 in a 6-year certificate of deposit (CD) that pays a guaranteed annual rate of 4%. He draws a time line showing when the cash flows will occur.

2. Oliver López deposits $12,000 in a bank account that pays 7% annual interest. He calculates the account balance after 5 years.

3. Carmen Hernández has saved $8,000 for a car deposit. The highest monthly payment she can afford is $455. The loan will have an APR of 11% payable at the end of each month. Determine which is the most expensive car you can buy if you buy it on credit payable over 60 months.

4. Determine the present value of a financial instrument that pays $18,500 in 10 years if instruments of similar risk pay 6% per year.

5. Find the future value (FV) of a $5,000 investment at an interest rate of 10% over 7 years.

6. Determine the interest rate you will pay if you are approved for a loan of $112,000 with annual payments of $15,000 over 8 years.

Reference no: EM133121401

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