Jesse owes $7200, he repays the debt with 8 semi-annual payments of $1200.00. Using linear interpolation...
Jesse owes $7200, he repays the debt with 8 semi-annual payments
of $1200.00. Using linear interpolation determine the nominal rate
compounded quarterly being charged.
Homework Answers
Calculating Semi-Annual Rate on Loan,
Using TVM Calculation,
I = [PV = 7,200, FV = 0, PMT = -1,200, N = 8]
I = 13.75%
Calculating Quarterly Rate,
APR(quarterly) = 4[(1 + 0.1375/2)1/2 - 1]
APR(quarterly) = 13.52%
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