Solutions to Chapter 1

[Using a financial calculator, enter: PV = (()100,000, FV = 0, n = 360, PMT = 804.62, and compute the interest rate.] The effective annual rate is: (1.00750)12 ( 1 = 0.0938 = 9.38%. The lender is more likely to quote the APR (0.750% ( 12 = 9%), which is lower. 44. EAR = e0.06 ( 1 = 1.0618 ( 1 = 0.0618 = 6.18% ................
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