Reinvest payments you receive in your money market account

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Reference no: EM132061620

Suppose you lend $46500 to a friend at an APR of 10.00?%. Your friend will pay you back beginning next month with 48 monthly installments. You can reinvest the payments you receive in your money market account at an APR of 1.40%, calculated monthly.

a. How much will your friend pay you each month

b. How much will you have in your account at the end of 48 months (to nearest $)

c. What is your effective annual return (EAR), _._ _%

Reference no: EM132061620

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