Suppose you are in a hurry to get your income tax refund. If you mail your tax return, you will receive your refund in 3 weeks. If you file the return electronically through a tax service, you can get the estimated refund tomorrow. The service subtracts a $50 fee and pays you the remaining expected refund. The actual refund is then mailed to the preparation service. Assume you expect to get a refund of $978. What is the APR (annual percentage rate) with weekly compounding? What is the EAR (effective annual percentage rate)? How large does the refund have to be for the APR to be 15%?
Suppose you are in a hurry to get your income tax refund. If you mail your tax return, you will receive your refund in 3 weeks. If you file the return electronically through a tax service, you can get the estimated refund tomorrow. The service subtracts a $50 fee and pays you the remaining expected refund. The actual refund is then mailed to the preparation service. Assume you expect to get a refund of $978. What is the APR (annual percentage rate) with weekly compounding? What is the EAR (effective annual percentage rate)? How large does the refund have to be for the APR to be 15%?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter11: Individuals As Employees And Proprietors
Section: Chapter Questions
Problem 4RP
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