Nominal interest rate is being charged

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1. What annual expenditure for 10 years is equivalent to spending $1000 at the end of the first year, $2000 at the end of the fourth year, $3000 at the end of the eight year, if interest is at 8 percent per year?

2. An investor has been offered $12,000 per year for the next five years and $6000 annually for the following seven years. At what price could be afford to sell his invention to earn 10 percent?

3. A loan of $12,000 is to be financed to assist in buying an automobile. On the basis of monthly compounding for 42 months, the end of month equal payment is quoted as $445. What nominal interest rate is being charged?

4. Bob Pearson borrowed $25,000 from a bank at an interest rate of 10% compounded monthly. The loan will be repaid in 36 equal installments over three years. Immediately after his 20th payment, Bob desires to pay the remainder of the loan in a single payment. Compute the total amount he must pay. Use semiannual compounding.

5. A standby generator was purchased 6 years ago for $4200. Similar equipment has shown an economic life of 15 years with a salvage of 15% of the first cost. The generator is no longer needed and is to be sold for $1800. The interest rate is 8%. What is the difference between the actual and anticipated equivalent annual capital recovery cost?

Reference no: EM13870180

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Nominal interest rate is being charged : A loan of $12,000 is to be financed to assist in buying an automobile. On the basis of monthly compounding for 42 months, the end of month equal payment is quoted as $445. What nominal interest rate is being charged?
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