You borrow $10,000 to purchase a car. You have to repay the loan in 48 equal end-of-period monthly payments. Interest is calculated at 1.25% per month. Determine the following:
3.1 The nominal interest rate is most nearly:
A. 15% B. 60% C. 1.5% D. 6% E. 20%
3.2 The effective annual interest rate is most nearly:
A. 17.7% B. 15.05% C. 16.08% D. 15% E. 20%
3.3 The effective rate of interest per month is most nearly:
A. 1.34% B. 1.25% C. 1.30% D. 1.52% E. 1.43%
3.4 The amount of the monthly payment is most nearly:
A. 287 B. 300 C. 250 D. 270 E. 278