What is the effective annual interest rate on loan

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Reference no: EM131994049

1. Michelle is offered a loan of $30, 000 that requires 60 monthly payments of $622.75. What is the effective annual interest rate on this loan? What would be the quoted rate be?

2. You have just won the lottery and will receive $1,000,000 every year. You will receive payments for 30 years, which will increase 3 percent per year. If the appropriate discount rate is 7 percent, what is the present value of your winnings?

3. Calculate the price change for a 1-percent decrease in market yield for the following bond: par = $1000; coupon rate = 6 percent, paid semi-annually; market yield = 6 percent; term to maturity = 10 years.

Reference no: EM131994049

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