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What is the annual effective interest cost

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1. Assume that a bank charges .01 interest per month. You borrow $50,000, to be paid by equal payment over a 35-month period, first payment to be due one month from now. How much will you have to pay each month? What is the annual effective interest cost? Using Excel

2. A Suppose the tooth fairy wants to buy a car, the cost of the car is $14,000. If you agree to finance it at an interest rate of 9% per annum (that is an EAR of 9%), and she agrees to make monthly payments at the end of each month for the next 48 months, how much will her payments be? Using Excel

Reference no: EM131962378

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