Calculate nominal annual rate convertible monthly

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You oversee controlling debt payments in your company. You notice that there are three payments due: one of $18 million in month No. 4, another of $39 million in month No. 10, and the last of $40 million in month No. 15. At the same time, he notes that there is a cash surplus of $20 million tied up. He proposes to his manager that they renegotiate the debt, paying all the cash surplus in two more months, and the rest in four installments in months N°4, N°6, N°8 and N°10, which should increase by 10% each time.

The market interest rate is 14.5% effective. The frequency to be used will be monthly.

Calculate the nominal annual rate convertible monthly, and the value of each of the four payments. Use a focal date in month N°15.

Reference no: EM133074894

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