Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hello, could an expert please help me? thank you in advance for your explanation and hardwork. 12. Nonannual compounding period The number of compounding periods

Hello, could an expert please help me? thank you in advance for your explanation and hardwork.
image text in transcribed
image text in transcribed
image text in transcribed
12. Nonannual compounding period The number of compounding periods in one year is called compounding frequency. The compounding frequency affects both the present and future values of cash flows. An investor can invest money with a particular bank and earn a stated interest rate of 6.60%; however, interest will be compounded quarterly. What are the nominal, periodic, and effective interest rates for this investment opportunity? for safe investment options. Your bank is offering you a certificate of deposit that pays a nominal rate of the effective rate of return that you will earn from this investment? 6.257% 6.136% 6.313% 6.221% 6% that is compounded at 6.257% 4.55% What is the effective rate of return that you will earn from this investment? \begin{tabular}{l} 6.257% \\ 6.136% \\ \hline 6.313% \end{tabular} 6.313% 6.221% Suppose you decide to deposit $24,000 in a savings account thot pays a nominal rate of 12%, but interest is compounded daily. Based on a 365 -day year, how much would you have in the account after four months? (Hint: To calculate the number of days, divide the number of months by 12 and multiply by 365 .) $24,979,57 $26,228.55 $25,479.16 525,653.85 You want to invest $24,00 6.77% looking for safe investment options. Your bank is offering you a certificate of deposit that pays a nominal rate of 6% that is compounded q 4.55% What is the effective rate of return that you will eam from this investment? 6.257 s 6.136% 2.279 6.313% 0.221% Suppose you decide to deposit $24,000 in a savings account that pays a nominal rate of 12\%, but interest is compounded daily, Based on a 365 -day year, how much would you have in the account after four months? (Hint: To calculate the number of days, divide the number of months by 12 and multiply by 365:) $24,979.57 $26,228.55 $25,479.16 525,853,65

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Essentials Of Machine Learning In Finance And Accounting

Authors: Mohammad Zoynul Abedin, M. Kabir Hassan, Petr Hajek, Mohammed Mohi Uddin

1st Edition

0367480816, 978-0367480813

More Books

Students also viewed these Finance questions