4. The monthly interest rate on a savings account is 1%, compounded monthly. The effective annual rate is (a) 11.25% (c) 12.68% (b) 12.00% (d) 13.13%
Q: The bank states they will charge you annual interest of 20% APR and interest is calculated…
A: The real interest that an investor earns on the investment and a borrower pays on loan after…
Q: A bank offers 0.5% effective monthly interest. What is the effective annual rate with monthly…
A: Effective annual interest rate(EAR) refers to the actual interest rate which is received on deposits…
Q: Assume a bank offers an effective annual rate of 7.20%. If compounding is monthly what is the APR?…
A: Annual percentage rate is the rate of interest which is charged to borrowers by the lenders and…
Q: The annual rate of interest on a mortage loan is 11 1/2% the monthly interest payment is $453.76..…
A: Annual interest rate = 11.5% Monthly interest rate = Annual interest rate / 12 = 11.5%/ 12…
Q: What is the interest earned in a savings account after 12 months on a balance of $4000 if the…
A: Since compounding is annually and we have to find the interest earned for 12 months, formula would…
Q: A monthly deposit of R161 is made once a month into an account at an interest rate of 18% pa…
A: Monthly deposit (M) = R 161 r = 18% per annum = 1.5% per month n = 13 deposits
Q: A bank charges interest rate of 5.50% on loans. The interest rate compounds monthly. What is the…
A: Effective annual interest rate is referred as the interest rate which is adjusted for compounding…
Q: Suppose that you make quarterly deposits into a savings account that earns 8% interest compounded…
A: Effective Annual Rate is a modified rate of return where it considers the compounding effect.…
Q: A credit card offers financing at an APR of 22.5 percent, with monthly compounding on outstanding…
A: The effective annual rate of interest is the actual or the real rate of interest paid or received…
Q: What is the outstanding balance of the loan after the 2nd year
A: Compound interest is the amount of interest charged on interest. In this method the interest…
Q: Computing Compound InterestA credit union pays interest of 2% per annum compounded quarterly on…
A: In this question future value is to be find out. Future value is the value of an asset which grows…
Q: A bank CD that pays 7.11 percent compounded semiannually. Calculate the effective annual interest…
A: In this question we need to compute the effective annual rate (EAR)
Q: Suppose that you deposited $1,000 in a savings account at the beginning of a year where the annual…
A: Deposit = $1,000 Annual interest rate = 18% Compounding = monthly
Q: What rate compounded monthly was charged on a loan of ₱3500.00 repaid in monthly installments of…
A: Loan = 3500 Monthly Installment = 107.19 Time Period (N) = 39 months
Q: 10) $350 is deposited at the end of each month for 4 months at 8% per year compounded monthly. What…
A: The future value is the amount that will be received at the end of a certain period. In simple…
Q: 3. A financial institution offers a nominal interest rate of 12% while compounding its accounts…
A: Effective Interest Rate: It refers to the annual rate of interest provided the effects of…
Q: 3a. You are paying an effective annual rate of 18.974 percent on your credit card. The interest is…
A: Solution:- Effective annual rate means the net interest rate for an year, after effect of all the…
Q: 4. What is the effective annual interest rate a. A savings account with 4% annual interest rate…
A: In this question we need to compute the effective annual interest rate.
Q: XYZ Bank pays simple interest of 2% with quarterly compounding for deposits in their savings…
A: LIFO method is also called Last -In first out method. Under this method money that is deposited at a…
Q: Suppose you invest $1,500.00 in an account with an annual interest rate of 6% compounded monthly (6%…
A: Monthly deposit = $125 Monthly interest = 0.5% In contrasts to a fee that the borrower may pay the…
Q: Calculate the effective annual rate (EAR) for a savings account with a stated APR of 6% compounded…
A: Effective annual rate is computed in order to determine the true interest rate earned on an…
Q: Suppose that you deposit $10 at the end of each day into a savings account that pays 2% interest…
A: Accumulated value can be defined as the sum of investment and interest earned on investment over a…
Q: A bank pays a stated annual interest rate of 8 percent. What is the effective annual rate using the…
A: In the given question we require to compute the effective annual rate if annual interest rate is 8%.
Q: A bank promises to pay an interest rate of 13.9 percent compounded quarterly. What is the effective…
A: Using excel effective rate formula
Q: . If a bank advertises a savings account that paysan 8% nominal interest rate compounded…
A: The question is based on the concept of calculation of effective annual interest rate in case of…
Q: A bank offers 6.00% on savings accounts. What is the effective annual rate if interest is compounded…
A: The effective annual rate of interest is the real return on the savings account when the effects of…
Q: 4- Bank America offers a stated annual interest rate of 5.0 percent, compounded quarterly, while…
A: To understand in which bank you should deposit your money, we need to calculate Effective interest…
Q: How much total principal is repaid between the 1st and 7th payment interval of a 4.5-year loan for…
A: Here, Time Period of Loan is 4.5 years Loan Amount (PV) is $4,887 Interest Rate on Loan is 7.4%…
Q: An account pays 7% annual interest compounded monthly. What is the effective interest rate on this…
A: A 7% annual interest compounded monthly implies that a monthly interest of 7%/12 is being compounded…
Q: you make 11 semi annual deposits of 550 pesos into a savings account the interest rate is 4.72%…
A: Interest rate=4.72% compounded quarterly Interest rate per quarter=4.72%4=1.18% Interest rate per…
Q: A three-year bank CD paying 7.02 percent compounded quarterly. Calculate effective annual interest…
A: The interest that an investor earns on the investment and a borrower pays on loan after considering…
Q: What is the annual percentage rate on a loan with a stated rate of 2 percent per quarter? A. 2.00…
A: In the given question we require to calculate the annual percentage rate on a loan if the stated…
Q: Suppose that you deposit $15 at the end of each month into a savings account that pays 2% interest…
A: Following informations are given in the question:
Q: A bank is currently offering a savings account paying an interest rate of 6.0 percent compounded…
A: Equivalent annual rate: It is an annual rate of interest whether compounded monthly, quarterly, or…
Q: A bank CD that pays 6.86 percent compounded daily (on a 365-day per year basis). Calculate the…
A: In the given question we need to calculate the EAR i.e. effective annual interest rate.
Q: What is the effective annual interest rate in each situation? Show and explain all supporting…
A: Effective annual interest rate is the actual Interest which is paid or received by taking into…
Q: Calculate and compare the effective rates of interest for saving accounts paying: (a.) a nominal…
A: Formula for computation of effective rates is as follows:Effective rates=1+rmn-1where,r=Interest…
Q: 9. A bank offers a savings account with a 3% annual interest rate, compounded monthly. What is the…
A: In this question we need to calculate the effective annual interest rate i.e. EAR.
Q: Chapter 7 Self Test Problem #2
A: Formula:
Q: If $6,840.00 is loaned for 4 months at an annual simple interest rate of 3.5%, how much interest is…
A: Given information: Principal (P): $6,840 Time (T) : 4 months Rate of interest (R) : 3.5%
Q: The Bank gives an advertisement of 15% account that yields 15.56% annually. How often is the…
A: Bank Account Interest Rate = 15% Bank Account Yield = 15.56%
Q: Macapagal Bank advertises savings account interest as 5.5 percent compounded weekly and chequing…
A: Because it accounts for the effects of compounding, the effective annual interest rate is the…
Q: 5. If a credit union pays 4.125% interest compounded quarterly, what is the effective rate of…
A: Interest rate (r) = 4.125% Number of compounding per year (m) = 4
Q: 3 The bank statement opposite shows transactions over a one-month period for a savings account that…
A: Interest income: It implies to the revenue that is earned by the lender from lending funds to the…
Q: What is the effective annual rate of a savings account with an annual interest rate of 5.9%…
A: Effective annual interest rate is referred as the interest rate which is adjusted for compounding…
Q: A bank offers 6.00% on savings accounts. What is the effective annual rate if interest is compounded…
A: The real interest that an investor earns on the investment and a borrower pays on loan after…
Q: A bank charges interest rate of 5.50% on loans. The interest rate compounds monthly. What is the…
A: Effective Annual Rate: The effective yearly rate is the interest rate that is in effect for the…
Q: If the nominal rate of interest paid on a savings account is 2% compounded monthly, what is the…
A: In this question we need to calculate the effective rate of interest.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- 4. The monthly interest rate on a savings account is 1%, compounded monthly. The effective annual rate is (а) 11.25% (c) 12.68% (b) 12.00% (d) 13.13%A bank offers 1.2% effective interest with monthly compounding, find the effective rate per annum.4. What is the effective annual interest rate a. A savings account with 4% annual interest rate compounded daily (assume a year consists of 365 days)?
- Suppose that you deposited $1,000 in a savings account at the beginning of a year where the annual interest rate is 18%, for each month the annual effective rate is: Select one: a. $1195,61 b. $11561.5 c. %19.561 d. $19561.5An account pays 7% annual interest compounded monthly. What is the effective interest rate on this account? note: show your answer in percent and to two decimal points. For example, input 12.126% as 12.13A deposit of 100 is made into an account that earns interest as follows: Time 0-3 constant force of interest of 4% Time 3-8 annual effective interest rate of 4% Time 8-10 simple interest rate of 4% What nominal rate of interest, compounded quarterly, is earned over the first ten years?
- You are told the effective interest rate on an account is 2.1%, if the interest is compounded continuously. What is the annual percentage rate for the account? Give your answer to four decimal places. The annual percentage rate is 2.1222 %.Which of the following compounding rates is equivalent to an effective interest rate of 2.75% p.a.? Select one: a.2.75% p.a. compounding yearly b.2.6% p.a. compounding monthly c.2.6% p.a. compounding daily d.2.7% p.a. compounding six-monthlyIf you borrow $7,300 at $800 interest for one year, what is your effective interest rate for the following payment plans? Note: Input your answers as a percent rounded to 2 decimal places. a. Annual payment b. Semiannual payments c. Quarterly payments d. Monthly payments Effective Rate of Interest % % % %
- 2.) What nominal rate compounded monthly is equivalent to 11% effective interest? A.) 10.48% B.) 11.48% C.) 12.48% D.) 13.48%7.If $1000 is deposited at 12.5% p.a. for one year, what is the effective annual interest rate if interest is compounded quarterly? Select one: a. 13.10% b. 12.50% c. 13.03% d. 13.05%1.If the nominal rate of interest is 48% compounded bi-monthly, find the rate of interest per period? 2.If the rate of interest is 8% compounded quarterly, find the nominal rate of interest.