DANIEL MEYER <meyer_d@yahoo.com> on 01/18/99 04:06:58 PM
To: studygroup4a@lists.casact.org
cc:
Subject: Exam Question: Greedy Mother
I have not been able to arrive at one of the choices
given for the particular question below. Further, a note indicated
that this question could be worked using calculator annuity keys.
Below follows the question:
Iuliana could not qualify for a home mortgage until her car note was
paid in full. She made the following deal with her greedy mother:
Her mother would pay her car note of $8,000 in exchange
for 7 equal monthly payments at the end of each month totaling to
$10,000.
What effective annual interest rate was Iuliana being charged by her
mother?
A) 33%
B) 20%
C) 55%
D) 99%
E) 12%
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