Can you please show your work and help me understand how to get the correct answers.
5. If the nominal rate of interest is 3.2%, then what is the quarterly periodic rate of interest? . Show 2 decimals in the percentage! Don't enter the % sign. For Example answer: 9.99
Answer: 0.8
7. A perpetuity has a discount rate of 6.7% and a payment of $421.22. What is the present value of this perpetuity?
Answer: 6,286.87
8. You borrow $76,810 to be repaid in annual payments over 6 years. The nominal interest rate on the loan is 9.2%. Based on the above how much should the annual payment should be? (Show pennies!) e.g. 99.99
Answer: 17,224.7
Periodic Quarterly rate = Nominal rate/Number of quarters in a year
= 3.2%/4
= 0.8%
7.Present value of perpetuity = Annual payment/Discount rate
= 421.22/6.7%
= $6,286.87
8.Annual payment = Amount of Loan/PVAF(9.2%, 6 years)
= 76810/4.4593
= $17,224.7
Can you please show your work and help me understand how to get the correct answers....
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