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What interest rate are your parents charging estimated up to

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Question

You owe $48,000 to your parents for funding some of your college. You promise to make 6 annual payments of $10,000 to settle your debt. Approximately what interest rate are your parents charging (estimated up to 2 decimal places), if you make the 6 annual payments beginning one year from now?

Your grandparents offered you some money when you do ACC 201 this fall. You are offered the following options. Assuming an annual interest rate of 4.0%, which option should you choose? Show your work for each alternative

a. Receive $30,000 immediately

b. Receive $4,100 at the end of each six months for four years. You will receive the first check in six months

c. Receive $3,900 at the end of each year for four years, and then $20,000 at the end of the fifth year.

Reference no: EM132316441

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