How much can be withdrawn each quarter for five years

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Question 1: What is the effective annual interest rate for 5 percent compounded (a) semiannually, (b) every four months, (c) quarterly, (d) every other month, and (e) monthly?

Question 2: While in college Ellen received $10,000 in student loans at 5% interest. She will graduate in June and is expected to begin repaying the loans in either 5 or 10 equal annual payments. Compute her yearly payments for both repayment plans.

Question 3: Suppose you wanted to buy a $100,000 house. You have $20,000 cash to use as the down payment. The bank offers to loan you the remainder at 6% nominal interest. The term of the loan is 20 years. Compute your monthly loan payment assuming the payment is the same for all months.

Question 4: If $15,000 is deposited into a savings account that pays 4% interest compounded quarterly, how much can be withdrawn each quarter for five years?

Reference no: EM132504657

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