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What is the effective interest rate if the lender uses

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Julie and Bill Stevens are purchasing a tractor and will need a $50,000 loan. The contractual rate is currently 7% with five equal annual payments. Their lender uses the add-on method of calculating interest.

Problem 1: What are the annual payments? Do not enter decimals or commas. $

Problem 2: What is the effective interest rate of the loan? Enter the percentage with 2 decimal places. %

Problem 3: What is the effective interest rate if the lender uses the remaining balance method of calculating interest?

Suppose Farm and Ranchers Bank and Trust uses the discount method of calculating interest. Discount the loan using the conditions in the previous question.

Problem 4: What are the annual payments? Do not enter decimals or commas. $

Problem 5: What is the effective interest rate of the loan? Enter the percentage with 2 decimal places. %

Reference no: EM133004530

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