Find the down payment and deferred period

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Reference no: EM131854781

1a. The price of a watch is $25,000 and you finance it with a down payment and 18 installments of $1,000 payable at the end of every month. The nominal interest rate is 2.5% convertible monthly. Find the down payment.

1b. A sum of $20,000 is used to buy a deferred perpetuity-due that pays $2,100 every year for the first 5 years and $1,000 per year thereafter. If the annual e↵ective rate is 6%, find the deferred period.

Reference no: EM131854781

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