Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Effective rate of interest
Find the interest rates earned on each of the following. Round each answer to two decimal places.
You borrow $710 and promise to pay back $781 at the end of 1 year.
%
You lend $710 and the borrower promises to pay you $781 at the end of 1 year.
You borrow $82,000 and promise to pay back $293,821 at the end of 7 years.
You borrow $20,000 and promise to make payments of $6,687.60 at the end of each year for 5 years.
On its savings accounts, the Gulf Bank offers a 2 percent nominal interest that is compounded monthly. Savings accounts at the Land Bank have the same effective annual return, but interest is compounded quarterly. What nominal rate does the Land Bank..
Briana recently received a credit card with a 14.6 percent nominal interest rate that is compounded monthly. With the card, she purchased a new MacBook Air for $965. The minimum payment on the card is $19 per month. If she makes the minimum payment o..
If you deposit money today in an account that pays 6% annual interest, how long will it take to double your money?
An investment will pay $150 at the end of each of the next 3 years, $250 at the end of Year 4, $400 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 12% annually, what is its present value?
Sawyer Corporation's 2015 sales were $14 million. Its 2010 sales were $7 million. At what rate have sales been growing?
You want to buy a car, and a local bank will lend you $25,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 12% with interest paid monthly. What will be the monthly loan payment?
Bill is confused about why liquidity risk management is such a problem for banks. He says, “It’s simple. If banks are worried about liquidity risk, why don’t they just hold a lot of liquid assets?” How would you answer Bill’s question?
Suppose you bought an A-rated, 20-year maturity, 8% coupon bond with face value of $1,000 and semi-annual coupon payments. Suppose that immediately after you bought the bond the yield on such bonds decreased from 10% to 9% and remains at 9% until you..
You are graduating from college at the end of this semester and after reading the The Business of Life box in this? chapter, you have decided to invest ?$4,600 at the end of each year into a Roth IRA for the next 40 years. How much will you have when..
In evaluating projects, Buford Engineers (BE) uses a discount rate of 15% for a before-tax analysis. One year ago, a robotic transfer machine was installed at a cost of $38,000. At the time, a 10-year life was estimated, but the machine has had a dow..
Explain how a net present value (NPV) profile is used to compare projects. How does this profile compare to that of internal rate of return (IRR)? How does reinvestment affect both NPV and IRR? Provide support for your assertions.
An American firm is evaluating an investment in Mexico. The project will require purchasing equipment from a variety of sources and shipping it to Mexico. The projected cost of buying the equipment and shipping it is $4.2 million. Calculate the NPV i..
The treasurer of Kelly Bottling Company (a corporation) currently has $220,000 invested in preferred stock yielding 12 percent. He appreciates the tax advantages of preferred stock and is considering buying $220,000 more with borrowed funds. Compute ..
Vintage, Inc. has a total asset turnover of 1.44 and a net profit margin of 6.63 percent. The total assets to equity ratio for the firm is 2.0. Calculate Vintage’s return on equity.
The Rosewood Corporation established a line of credit with a local bank. The maximum amount that can be borrowed under the terms of the agreement is $500,000 at a rate of 10 percent. If the firm needs $280,000 for 6 months, what is the annual cost of..
Explain why the actual federal funds rate could not drop below the interest rate the Fed pays on reserve deposits.
Jim and Alice Lange employess at Walmart have put themselves on a strict budget. There goal at the years end is to buy a boat for $20,000 in cash. Their budget includes the following 41% food and lodging 14% entertainment 10% educational Jim earns $2..
Which one of these would generally be considered the most rational action for a tax-paying investor?
Which of the following are practical difficulties associated with capital structure and degree of leverage analyses?
You have your choice of 3 investments. Investment A is a 15-year annuity that features end of month $1500 payments and has an interest rate of 5.5% compounded monthly. Investment B is a 5 percent continuously compounded lump sum investment also for 1..
Suppose after you graduate, you plan to be a stock analyst for a big financial institution. You know that if the stock market increases in value, your will get a good job with a good salary. If the stock market declines, you will get a job, but the s..
Compute the future value of $5,000 deposited annually for 5 years, assuming a 10% annual interest rate compounded once a year. You may want to use the Excel function for computing the future value of an annuity or an FV table of factors. Explain the ..
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: info@expertsmind.com
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd