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Problem 5 Intro The quoted interest rate is 1.1% (APR). 18 Attempt 1/10 for 10 pts. Part 1 What is the effective annual rate if interest is compounded annually? 1.1% Correct B D 1 APR 1.1% 2 Periods 3 Compounding EAR Formula per year 4 Annually 1 0.011 =(1+B$1/B4)^B4-1 With annual compounding, there is no difference between the APR and the EAR. B Attempt 3/10 for 10 pts. Part 2 What is the effective annual rate if interest is compounded quarterly? 0.01104 Correct 18 Attempt 3/10 for 10 pts. Part 2 What is the effective annual rate if interest is compounded quarterly? 0.01104 Correct B D 1 APR 1.1% 2 3 Compounding Periods per year EAR Formula 1 4 Annually 5 Quarterly 0.011 =(1+B$ 1/B4)^B4-1 0.01105 =(1+B$ 1/B5)^B5-1 4 18 Attempt 6/10 for 10 pts. Part 3 What is the effective annual rate if interest is compounded weekly? 4+ decimals Submit Problem 6 Intro You are about to take out an amortizing mortgage (term loan) for $550,000 with monthly payments to buy a house. The interest rate is quoted as an APR. A B 1 Amount 550,000 2 Term (years) 10 3 Quoted interest rate 0.056 Attempt 5/10 for 10 pts. Part 1 What is your monthly payment? 0+ decimals Submit | Attempt 5/10 for 10 pts. Part 1 What is your monthly payment? 0+ decimals Submit Attempt 1/10 for 10 pts. Part 2 What is the effective annual rate on the loan? 3+ decimals Submit

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