How much does the $1,000 to be received upon a bond's maturity in 4 years add to the bond's price if the appropriate discount ra
1 answer:
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The greatest interest rate that John can accept and meet the criteria is 12.25% compounded monthly
The monthly payment formula for a loan:
Where PV is the principal value of the loan,
r is the rate per month,
n is the number of months,
Here, PV = $ 4,500, n = 36,
Let r be the annual rate of interest,
P ≤ 150
Thus, the greatest annual interest rate = 0.1225 = 12.25 %
Therefore, Option C is correct.
To know more about the monthly payments and interest rate, refer to the link below: