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THE ANSWER ONLY Suppose your credit card issuer...

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Finance

THE ANSWER ONLY
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Suppose your credit card issuer states that it charges a 22.00% nominal annual rate, but you must make monthly payments, which amounts to monthly, compounding. What is the effective annual rate? a. 28.50% b. 20.71% C. 24.36% d. 21.44% e. 24.85% Your uncle will sell you his bicycle shop for $220,000, with "seller financing," at a 6.0% nominal annual rate. The terms of the loan would require you to make 12 equal end-of-month payments per year for 4 years, and then make an additional final (balloon) payment of $50,000 at the end of the last month. What would your equal monthly payments be? a. $4,242.45 b. $4,115.18 C. $3,563.66 d. $4,284.88 e. $3,181.84 Suppose the U.S. Treasury offers to sell you a bond for $3,000. No payments will be made until the bond matures 10 years from now, at which time it will be redeemed for $4,500. What interest rate would you earn if you bought this bond at the offer price? a. 3.43% b. 3.27% C. 3.10% d. 4.14% e. 4.80%

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