You are considering buying an Audi for $50,000 and your financing is quoted at 6% APR with monthly compounding.

 

 

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a. What rate do you need in order to use one of the following annuity formulas to find the monthly payments? 1 • n = ( x + ( 1 = (₁ +² m ² ) - (1 r)n PV(annuity of C for n periods with interest rate r) = Cx. b. What is the effective annual rate of interest for this financing? a. The rate that should be used for the formulas is r= (Round to six decimal places.) b. The effective annual rate is (Round to four decimal places.) %. or PV(growing perpetuity) = C r-g a. What rate do you need in order to use one of the following annuity formulas to find the monthly payments? 1 • n = ( x + ( 1 = (₁ +² m ² ) - (1 r)n PV(annuity of C for n periods with interest rate r) = Cx. b. What is the effective annual rate of interest for this financing? a. The rate that should be used for the formulas is r= (Round to six decimal places.) b. The effective annual rate is (Round to four decimal places.) %. or PV(growing perpetuity) = C r-g

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Question Soln 9 Rate to be use... View the full answer