A loan company offers money at 1.95% per month compounded monthly. (a) What is the nominal interest
Question:
(a) What is the nominal interest rate?
(b) What is the effective annual interest rate?
(c) How many years will it take an investment to triple if interest is compounded monthly?
(d)How many years will it take an investment to triple if the nominal rate is compounded continuously?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 58% (12 reviews)
a Nominal interest rate r 195 12 234 b Effectiv...View the full answer
Answered By
PALASH JHANWAR
I am a Chartered Accountant with AIR 45 in CA - IPCC. I am a Merit Holder ( B.Com ). The following is my educational details.
PLEASE ACCESS MY RESUME FROM THE FOLLOWING LINK: https://drive.google.com/file/d/1hYR1uch-ff6MRC_cDB07K6VqY9kQ3SFL/view?usp=sharing
3.80+
3+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Accounting questions
-
What is the nominal interest rate compounded monthly if a four-year loan of $6000 is repaid by end-of-month payments of $144.23?
-
How many years will it take an investment to triple if the interest rate is 6% compounded annually?
-
A loan company offers money at 1.25% per month compounded monthly. (a) What is the nominal interest rate? (b) What is the effective annual interest rate?
-
Metro builds and operates traditional shopping malls. It holds a $25 million deferred tax asset relating to credit carryforwards at the state, local, and Federal levels. No valuation allowances...
-
Net present ratio and IRR Use the information presented for Lakeside, Inc., in Mini-Exercise 16.4 and your calculation of the net present value of the new production equipment. In Mini-Exercise 16.4,...
-
Is it possible to temper an oil-quenched 4140 steel cylindrical shaft 100 mm (4 in.) in diameter so as to give a minimum tensile strength of 850 MPa (125,000 psi) and a minimum ductility of 21%EL? If...
-
Why does the amount of interest earned on an investment increase each year?
-
On November 1, 2008, Janet Morton and Kim Wong formed Pet Kingdom, Inc., to sell pets and pet supplies. Pertinent information regarding Pet Kingdom is summarized as follows. Pet Kingdom's business...
-
Kern County Public Health received a grant in the fiscal year 2018-2019 for $256,783. The grant funding prospect for fiscal year 2019-2020 was released in the amount of $317,893. By what percentage...
-
Show how the IS and LM schedules look in the monetarist view. Use these schedules to illustrate the monetarist conclusions about the relative effectiveness of monetary and fiscal policy.
-
Bank A offers a nominal annual interest rate of 7% compounded daily, while Bank B offers continuous compounding at a 6.9% nominal annual rate. If you deposit $3,000 with each bank, what will be the...
-
If you invest $15,000 today at a 6% interest compounded daily, what will be your ending value after 12 years?
-
The following amounts are available from the 2008 annual report of Caterpillar, the maker of machinery and engines for the construction, mining, and forestry industries. (All amounts are in millions...
-
Mr. Chandler, the production supervisor, bursts into your office, carrying the company's prior year performance report and thundering, "There is villainy here, sir! And I shall get to the bottom of...
-
Describe 3 chart types you could use to analyse budget data, including variance. List the 3 types of charts you will create for the Business Budget. Add to this Business Budget spreadsheet by...
-
Perform the following arithmetic operations in their given bases. Explain or show the carries or borrows used whenever necessary. Also specify if you are switching the operands whenever necessary....
-
Assume a Centaur V upper stage with an empty mass of 2,247 kg, diameter of 3.05 meters and height of 12.68m, the wall thickness is 41mm, whereas the motor can be assumed to fill up 1/4 of the inner...
-
Jabari Manufacturing, a widgets manufacturing company, divides its production operations into three processes-Department 1, Department 2, and Department 3. The company uses a process costing system....
-
The graph in Fig. 8 shows the total sales in thousands of dollars in a department store during a typical 24-hour period. (a) Estimate the rate of sales during the period between 8 a.m. and 10 a.m....
-
As of January 1, 2018, Room Designs, Inc. had a balance of $9,900 in Cash, $3,500 in Common Stock, and $6,400 in Retained Earnings. These were the only accounts with balances in the ledger on January...
-
Consider the following financial statements for Dell Corporation: The closing stock price for Dell was $13.47 on January 28, 2011. The numbers of outstanding shares were 1,944 million in 2011 and...
-
J. C. Olson & Co. had earnings per share of $8 in 2012, and it paid a $4 dividend. Book value per share at year-end was $80. During the same period, the total retained earnings increased by $24...
-
The table that follows summarizes the financial performances of four companies in the year 2012. From the given information, which company generated the highest return on equity? (a) Company A (b)...
-
Suppose your firm is considering Investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 10 percent, and that the maximum allowable...
-
The Dauten Toy Corporation currently uses an injection molding machine that was purchased prior to the new tax legislation. This machine is being depreciated on a straight-line basis, and it has 6...
-
On January 1, 2024, Blue Co. enters into a contract to lease medical equipment from Green Co. for 5 years. Green Co. puts the patient-monitoring equipment in Blue Co.'s premise. The equipment...
Study smarter with the SolutionInn App