Chapter 6 Self-Study Questions
| 1. | i = (1 + 0.07 / 12) ^12 – 1 = 0.723 = 7.23% |
| 3. | r = 12 (12th root (1 + 0.07) – 1) = 0.0678 = 6.78% |
| 5. | i = (1 + 0.05 / 26) ^ 4 – 1 = 0.0077 = 0.77% |
| 7. | r = 13 (4th root (1 + 0.0254) – 1) = 0.0818 = 8.18% |
| 9. | i = (1 + 0.078 / 12) ^ 1 – 1 = 0.0065 = 0.65%
|
| 11. | Their actual interest rate is i = 6.6% / 52 = 0.127% per week.
|
| 13. | Their actual interest rate is i = 7.6% / 4 = 1.9% per quarter.
The first quarter cash-flow instance is $5000. The second quarter cash-flow instance is –$537. The third quarter cash-flow instance is –$457. |
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