Relationship between the ear and the apr

Assignment Help Finance Basics
Reference no: EM131313259

Consider a borrowing arrangement in which the annual percentage rate (APR) is 8%.

a. Under what conditions does the effective annual rate of interest (EAR) differ from the APR of 8%?

b. As the frequency of compounding increases within the annual period, what happens to the relationship between the EAR and the APR?

Reference no: EM131313259

Questions Cloud

Accurate predictions about company financial condition : Then, imagine you are an investor or creditor; suggest the ratios that you believe would provide an investor or creditor with the most important information needed to make accurate predictions about the company's financial condition. When analyzin..
What is orange trees intrinsic value of equity : OrangeTree Corporation’s value of operations is estimated to be $550 million. Orange Tree has $100 million in debt (it has no preferred stock) and 10 million shares of common stock outstanding. Assume that OrangeTree has not yet made the distribution..
Bit array implementation : Both implementations should use the same sets. Using the Timing class, compare the major operations (union, intersection, difference, and subset) of each implementation and report the actual difference in times.
Valuate current or future applications of biotechnology : Write a paper which includes the following: Evaluate current or future applications of biotechnology in the fields of medicine or agriculture
Relationship between the ear and the apr : As the frequency of compounding increases within the annual period, what happens to the relationship between the EAR and the APR?
Explain how a quarter-wave transformer works : Explain why a complete revolution (360 degrees) around the Smith chart represents a distance of λ/2 on the transmission line - Explain how a quarter-wave transformer works to achieve load matching.
What is balance in the account if you make no withdrawals : Suppose you deposit $1,000 in an account with an APR of 4%, with compounding quarterly.- After 10 years, what is the balance in the account if you make no withdrawals?
Design and present a data collection table : Design and present a data collection table that you will use to collect and monitor data pertaining to the second of two simulations when it starts. The data that you will collect should be determined based on what you learn from the simulation in..
Benchmark price–sales ratio for the company : TwitterMe, Inc., is a new company and currently has negative earnings. The company’s sales are $1,300,000 and there are 135,000 shares outstanding. If the benchmark price–sales ratio for the company is 5.3, how much will you pay for the stock? If the..

Reviews

Write a Review

 

Finance Basics Questions & Answers

  Under the capm assumptions determine expected return

Assume the risk free return is 4% and the market portfolio has an expected return of 10% and a volatility of 16%. Johnson and Johnson Corporation stock has a 20 percent volatility and a correlation with the market of 0.06.

  How many years will it take to reach your goal

How many years will it take to reach your goal? Round your answer to the nearest whole number.

  Explain how a performance of department can be measured

Explain how a performance of Department can be measured and Make sure you use relevant concepts covered in the course

  Compute the profit margin ratios for golden times ltd

Compute the following ratios for Golden Times Ltd.:Return on capital employees, The profit margin, The turnover of capital.

  Assignment on the market structure

You have been hired as a consultant by your local mayor to look at the various market structures. Your role is to provide analysis and answers to these important questions that will help the mayor understand the structures of many of the businesse..

  What is the value of the stock today

What is the value of the stock today? Round your answer to the nearest cent. Do not round your intermediate computations.

  Aeritech corporation paid dividends per share of 356

ameritech corporation paid dividends per share of 3.56 in 1992 and dividends are expected to grow 5.5 a year

  Product at each stage of the product life cycle

at each stage of the product life cycle, justifying your assessment. Then find a colleague's post wherein you disagree with one of their selections. State why, and what stage you would have identified for the product.

  A warrant for ace corporation stock enables the holder to

a warrant for ace corporation stock enables the holder to purchase one share of common stock at 30 a share. the stock

  What effect would a decreased cost of capital have on a firm

What effect would a decreased cost of capital have on a firm’s future investments?

  Analyze the common debt and equity securities

Analyze the common debt and equity securities, determine which of the relative risks and returns are associated with each. Provide specific examples.

  You are looking at viacom bonds in which there remain 20

you are looking at viacom bonds in which there remain 20 years to maturity. the current price of a 1000 par bond is

Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd