What is the nominal interest rate

Reference no: EM13267749

You borrow $2,000 from Gougo's, a well-known loan consolidation outfit. The loan is an "unbelievably low"2.5percent per month compounded monthly. You have 2 years to pay back the loan.

a. What is the nominal interest rate?

b. What is the effective interest rate?

c. If you wait until the end of year 2 to pay it off in one lump sum, how much must you pay? Use the "period interest rate" approach.

d. If you wait until the end of year 2 to pay it off in one lump sum, how much must you pay? Use the "effective interest rate" approach.

e. Of your payment in parts (c) or (d), how much is interest?

f. Suppose you make equal end-of-month payments. How much is the monthly amount?

Reference no: EM13267749

Questions Cloud

Global encounters-achievements and exploitation : Explain at least two (2) possible reasons for the differences between the results of exploration and trade by the Chinese and by the European states. Consider the reach of the Chinese Treasure Fleet and the global empires that Spain and Portugal esta..

At what speed is the meterstick moving relative to you : A meterstick moves past you at great speed. Its motion relative to you is parallel to its long axis. at what speed is the meterstick moving relative to you

What is the company wacc : The company is funded 40% debt, 5% preferred, and 55% common equity. The tax rate is 40%. What is the company's WACC?

Determine if project is worthwhile using the payback method : It is expected that Dylans Donuts could sell the equipment at the end of its expected life for $15,000. Dylans marginal tax rate is 30% and its required rate of return is 12%. Dylans has a minimum required payback of 3 years.

What is the nominal interest rate : You borrow $2,000 from Gougo's, a well-known loan consolidation outfit. The loan is an "unbelievably low"2.5percent per month compounded monthly. You have 2 years to pay back the loan. What is the nominal interest rate?

What is the polarization angle for this light : When light is incident on a surface the critical angle is 40.0 degrees. The two materials are air and glass. What is the polarization angle for this light

Identify some of the techniques an attacker might employ : Computer security is not an issue for organizations alone. Anyone whose personal computer is connected to a network or the Internet faces a potential risk of attack. Identify all the potential security threats on a personal computer.

What horizontal force : What horizontal force, F, is required to hold the plate stionary against the water jet? Perform the momentum balance in the direction of the jet's flow and give your final answer in lbf? d= 2ft, Q = 0.36 ft^3/s

What will be the final amounts of saturated vapor and water : A tank of 0.52 m3 capacity is filled with steam at 2 MPa and 350oC. The tank and its contents are slowly cooled to 125oC. Answer the following questions assuming that there was a negligible volume change during the cooling process

User Account

All Pages