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Randal Inc. will generate $73,000 in annual revenue each year for the next 8 years from a new investment. If the appropriate interest rate is
- Randal Inc. will generate $73,000 in annual revenue each year for the next 8 years from a new investment. If the appropriate interest rate is 8.5 percent, what is the present value of the savings? Do not round intermediate calculations and round your final answer to 2 decimal places.
- Find the EAR in each of the cases. Use 365 days a year Do not round intermediate calculations and round your final answer to 2 decimal places.
Stated Rate (APR) | Number of Times Compounded | Effective Rate |
8% | Quarterly |
|
16 | Monthly |
|
12 | Daily |
|
15 | Infinite |
|
- Eloville Bank want to earn an effective annual return on its consumer loans of 16 percent per year. The bank uses daily compounding interest on its loans. What interest rate is the bank required by law to report to potential borrowers? Explain why this rate is misleading to an uninformed borrower. Use 365 days a year Do not round intermediate calculations and round your final answer to 2 decimal places.
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