What was the nominal annual interest rate

Assignment Help Microeconomics

Reference no: EM132130644

Questions -

1. Fifteen years ago $1000 was deposited in a bank account, and today it is worth $2370. The bank pays interest semi-annually. What was the nominal annual interest rate paid on this account?

2. You borrow $3500 for one year from a friend at an interest rate of 1.5% per month instead of taking a loan from a bank at a rate of 18% per year. Compare how much money you will save or loose on the transaction?

3. John's family is expanding in number, and so he decides to sell his current home and upgrade to a larger home. He estimates that he can sell his current home for $400,000 and can buy a larger home for $475,000. He plans to use the entire $400,000 sale proceeds as a down payment on the new home and will finance the remainder for 10 years at 6% nominal annual interest compounded monthly. What is his estimated monthly mortgage payment?

4. Assume that a piece of property is purchased for $500,000. A 20% down payment is made and the rest is financed through a 30-year mortgage loan with a 5.25 % annual interest rate, compounded monthly. The loan will be repaid in equal monthly payments. Calculate the monthly payments. What is the total interest paid through the life of the loan?

Reference no: EM132130644

Questions Cloud

Discuss the advantages and disadvantages of the policy : With the innovation of hydraulic fracturing and horizontal drilling to extract natural gas from shale in the United States, U.S. gas production has increased.

The type of e-commerce information systems : Research a company, large or small, that has taken advantage of the recent technological advances developed in information systems.

Where does the inspiration for new technology come from : Where does the inspiration for new technology (knowledge, not material items) come from? How is it moved from thought to fruition?

Conduct research on the topic of erp systems : Would you bring in an outside consultant or rely on in-house talent to track down the causes that resulted in the less-than-optimal outcomes?

What was the nominal annual interest rate : Fifteen years ago $1000 was deposited in a bank account, and today it is worth $2370. What was the nominal annual interest rate paid on this account

Do you believe there is an ethical issue with interest group : Interest groups with normatively "good" causes often use profesisonal lobbyists; this is evident from AARP's expenditures.

What is the impact on the political makeup : What were the major points of the "Virginia Plan" at the Constitutional Convention? How did the "New Jersey Plan" differ? How did the "Great Compromise" break.

Discusses in depth the state of the current us economy : Find an article that discusses in depth the state of the current U.S. economy or how much the U.S. economy is growing

How much should doug offer jim : Jim has a used car that is worth between 0 and 2000 pounds (an equal chance of each price in between). Doug is thinking of buying the car and knows.

User Account

All Pages