What is the effective annual interest rate on his loans

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Reference no: EM131969439

(a) Assume that your savings account offers you an APR of 6.0% with quarterly compounding. What is the present value of $2,000 to be received 21 months from today?

(b) Lenny Loanshark charges 1 percent per week on his loans. Assuming there are exactly 52 weeks in a year, what APR must he report to consumers? What is the effective annual interest rate on his loans?

(c) You have been given the once-in-a-lifetime opportunity to invest $5000 in a certificate of deposit paying an APR of 36.0% with monthly compounding. Exactly how many months will it take for your $5,000 to grow to $20,000?

Reference no: EM131969439

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