Case study homework Q2

***Please answer only part e &f***

Enea, a budding entrepreneur, was excited that her presentation at her college annual entrepreneurial competition was voted the best by every judge. An investor in the audience was very impressed by her business plan and offered to help her start her designer clothing store by offering her a loan at 4.7% compounded monthly. After two years, her business had savings of $86,800.00 and she used the entire amount to completely pay off her outstanding debt with the investor.

Use timelines wherever (and as often) as necessary.

a. What was the loan amount provided to her by the investor?

b. What rate, compounded annually, would have resulted in the same accumulated debt of $86,800.00

c. How long would it take for her debt to reach $117,880.00 Don't consider any potential prize money and assume the same interest rate of 4.7% compounded monthly throughout this extended period.

d. If she had obtained the same loan amount from a nearby bank, it would have accumulated to $95,110 in 16 months instead of two years. What is the interest rate compounded quarterly charged by the bank?

e. After two years, what would her savings be if the original loan was issued to her with interest compounded semi-annually instead of monthly as it was?

f. What was the size of the loan provided by the investor if she was charged 4.7% compounded monthly for the first year, and 5% compounded semi-annually for the second year and it accumulated to $86,800.00 in two years?