What is its effective rate and nominal rate

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Reference no: EM13809153

1) The nominal rate of Bank A is 8% and interests are compounded monthly, what is its effective rate? The effective rate of Bank B is 9.31% and interests are compounded four times a year, what is its nominal rate?

2) Suppose the present value of a 2 year ordinary annuity is $100. If the discount rate is 10 percent, what must be the annual cash flow?

3) If an annuity pays $1,000 at the end of each year for ten years, what is its yield if the price of the annuity is $7,721?

4) What is the present value of $500 perpetuity at 5%?

5) If you take a 10-year $20,000 loan from the bank, the interest rate is 10%, what is your monthly payment?

Reference no: EM13809153

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