"ORDINARY ANNUITIES CERTAIN, INTEREST RATE vs PERIODIC PAYMENT. An ANNUITY is a series of equal payments made at equal intervals. PAYMENT INTERVAL is the time between successive payments. TERM is time from beginning of first payment interval to the end of the last payment interval. ANNUAL RENT is the sum of all payments made in one year. SIMPLE CASE: payment interval and interest period coincide. ANNRATE% is the nominal annual interest rate. NUMYEARSis the term in years. PAYMNINT is the payment interval in months. PERPAYMN is the periodic payment. FREQCONV is the number of intervals in one year. VALUANNU is accumulated value of the annuity at term. PRESVAL is annuity's value today. ANNURENT is the annual payment. *** Answers to problems *** (a) Set ANNRATE%=1, NUMYEARS=1.5 (18 mo = 1.5 yr), PAYMNINT=1, PERPAYM=45. Move cursor to ANNRATE%, type s. For name, type PRESVALU (ent). For value, type 649.50-49.50 (ent). For range, use default, type (ent). Via approximation, ANNRATE% is 40.44% and (b) effective rate is 48.84% Type any key to exit. ||(a) A camcorder can be bought for $649.50 cash or for $49.50 down and $45.00 per month for 18 months. What nominal rate compounded monthly is being charged? (b) What effective (annual) rate is being charged? Type , to see answers. Type (F2) to return to help file. '' (c) Copyright PCSCC, Inc., 1993"
