6. Suppose that a loan is offered with quarterly payments and a 13.36% APR. What is...

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Finance

6. Suppose that a loan is offered with quarterly payments and a13.36% APR. What is the loan's effective annual
rate (EAR)?
A. 14.21%
B. 14.04%
C. 13.92%
D. 13.81%
E. 13.65%

7. Suppose that a loan is offered with monthly payments and a10.56% APR. What is the loan's effective annual
rate (EAR)?
A. 10.78%
B. 10.85%
C. 10.92%
D. 11.09%
E. 11.17%

8. Gretchen is 30 years old and has just changed to a new job. Shehas $37,500 in the retirement plan from her
former employer. She can roll all of that money into the retirementplan of the new employer. She will also
contribute $4,800 at the end of each year into her new employer'splan. If the rolled-over money and the new
contributions both earn an annual return of 5.85%, compoundedannually, how much should she expect to
have when she retires in 35 years?
A. $792,398
B. $799,885
C. $810,643
D. $820,912
E. $839,696
9. Olivia is 30 years old and has just changed to a new job. Shehas $37,500 in the retirement plan from her
former employer. She can roll all of that money into the retirementplan of the new employer. She will also
contribute $400 at the end of each month ($4,800 per year) into hernew employer's plan. If the rolled-over
money and the new contributions both earn an annual return of5.85%, compounded monthly, how much
should she expect to have when she retires in 35 years?
A. $860,728
B. $843,576
C. $839,696
D. $820,912
E. $810,643

Answer & Explanation Solved by verified expert

4.4 Ratings (950 Votes)

6 EAR 113364411404 Option B is correct7 EAR11056121211109 Option D is correct8 Value of rolled over money at the age See Answer

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Transcribed Image Text

6. Suppose that a loan is offered with quarterly payments and a13.36% APR. What is the loan's effective annualrate (EAR)?A. 14.21%B. 14.04%C. 13.92%D. 13.81%E. 13.65%7. Suppose that a loan is offered with monthly payments and a10.56% APR. What is the loan's effective annualrate (EAR)?A. 10.78%B. 10.85%C. 10.92%D. 11.09%E. 11.17%8. Gretchen is 30 years old and has just changed to a new job. Shehas $37,500 in the retirement plan from herformer employer. She can roll all of that money into the retirementplan of the new employer. She will alsocontribute $4,800 at the end of each year into her new employer'splan. If the rolled-over money and the newcontributions both earn an annual return of 5.85%, compoundedannually, how much should she expect tohave when she retires in 35 years?A. $792,398B. $799,885C. $810,643D. $820,912E. $839,6969. Olivia is 30 years old and has just changed to a new job. Shehas $37,500 in the retirement plan from herformer employer. She can roll all of that money into the retirementplan of the new employer. She will alsocontribute $400 at the end of each month ($4,800 per year) into hernew employer's plan. If the rolled-overmoney and the new contributions both earn an annual return of5.85%, compounded monthly, how muchshould she expect to have when she retires in 35 years?A. $860,728B. $843,576C. $839,696D. $820,912E. $810,643