Effective annual rate of interest

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Reference no: EM131998632

a) What is the most that you would pay for an investment that promises to pay $18000 a year forever with the first payment starting one year from now? Assume that your required rate of return for this investment is 22.1%.

b) A loan has a stated annual rate of 16.5%. If loan payments are made monthly and interest is compounded monthly, what is the effective annual rate of interest?

c) You invest $430 at the beginning of every year and earn an annual rate of return of 8.2%, how much will you have in your account after 30 years?

d) You currently have $5000 in a retirement savings account that earns an annual return of 10%. You want to retire in 48 years with $1,500,000. How much more do you need to save at the end of every year to reach your retirement goal?

Reference no: EM131998632

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