A large game production company has offered to buy a game developed by a small company of four members. The large company has offered to buy it for $14,500, but will pay it out over 2 years with monthly payments and an annual interest rate of 6% compounded quarterly.
(a) What is the effective monthly interest rate?
(b) What are the payments that will be made to the small company?
(c) Assuming the four members of the small company split the money equally, what is the future worth and present worth of this sale for each individual after the last payment has been recieved?
(d) What would the annual interest rate need to be to make the future worth of the sale $5,000 per member?
