What interest rate would you pay on that loan

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1. At a discount rate of 6.00%, find the present value of a perpetual payment of $3,500 per year. If the discount rate were lowered to 3.00%, half the initial rate, what would be the value of the perpetuity?

2. You've been offered a loan of $35,000, which you will have to repay in 11 equal annual payments of $7,000, with the first payment due one year from now. What interest rate would you pay on that loan?

3. How long will it take to pay off a loan of ?$49,000 at an annual rate of 9 percent compounded monthly if you make monthly payments of $650? Use five decimal places for the monthly percentage rate in your calculations.

Reference no: EM131997830

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