# Compare The Average Level Of Interest Rates Among The Three Types Of Loans Business And Finance Assignment Help

### Question Description

E1 Go to the Federal Reserve Web site, http://www.federalreserve.gov. Click on theConsumer Information tab, and research consumer credit in the varioushyperlinks. Find average interest rates charged by commercial banks on newautomobile loans, personal loans, and credit card plans.

a.Compare the average level of interest ratesamong the three types of loans.

b.Click on the Economic Research & Datatab, click on the “Statistics: Releases and Historical Data” hyperlink and then“Consumer Credit,” and compare trends in the cost of consumer credit providedby commercial banks over the past three years.

P2 Find the FV of \$10,000 invested now afterfive years if the annual interest rate is 8 percent.

a.What would be the FV if the interest rate isa simple interest rate?

b.What would be the FV if the interest rate isa compound interest rate?

P3 Determine the future values (FVs) if \$5,000is invested in each of the following situations:

a.5 percent for ten years

b.7 percent for seven years

c.9 percent for four years

P4 You are planning to invest \$2,500 today forthree years at a nominal interest rate of 9 percent with annual compounding.

a.What would be the future value (FV) of yourinvestment?

b.Now assume that inflation is expected to be 3percent per year over the same three-year period. What would be the investment’sFV in terms of purchasing power?

c.What would be the investment’s FV in terms ofpurchasing power if inflation occurs at a 9 percent annual rate?

P5 Find the present value (PV) of \$7,000 to bereceived one year from now assuming a 3 percent annual discount interest rate.Also calculate the PV if the \$7,000 is received after two years.

P7 Determine the present value (PV) if \$15,000 isto be received at the end of eight years and the discount rate is 9 percent.How would your answer change if you had to wait six years to receive the\$15,000?

P16 Use a financial calculator or computer softwareprogram to answer the following questions:

a.What would be the future value (FV) of\$15,555 invested now if it earns interest at 14.5 percent for seven years?

b.What would be the FV of \$19,378 invested now ifthe money remains deposited for eight years and the annual interest rate is 18percent?

P17 Use a financial calculator or computer softwareprogram to answer the following questions:

a.What is the present value (PV) of \$359,000that is to be received at the end of twenty-three years if the discount rate is11 percent?

b.How would your answer change in (a) if the\$359,000 is to be received at the end of twenty years?

P19 Use a financial calculator or computer softwareprogram to answer the following questions.

a.What would be the future value (FV) of\$19,378 invested now if the money remains deposited for eight years, the annualinterest rate is 18 percent, and interest on the investment is compoundedsemiannually?