Purchase Price Per Cents Per Share

1.If you are borrowing money and paying interest, would you prefer an interest rate that compounds

I would want an interest rate that compounds annually. With an annual loan, it doesn’t compound that often which is less interest.

academic year interest rate of 3.76 percent would pay a 5,032 dollars interest over 10 years,

16. If the nominal interest rate on an account is 1% and the inflation rate is 2%, the real interest rate is:

8. Karen has $16,000 that she wants to invest for 1 year. She can invest this amount at The North Bank and earn 5.50 percent simple interest. Or, she can open an account at The South Bank and earn 5.39 percent interest, compounded monthly. If Karen decides to invest at The North Bank, she will:

EEC calculated the amount of time involved the anticipation of its cost ($3 million). The timeline in recovering their cost of investment ($2 million) initially for the foundation of this investment any profit made in the future of this investment will be justified as a profit for the company. If EEC can anticipate a fast return on its investment it is a profitable wise decision in making the investment financial, it is considered to be an easier way of formulating investments financially. On the basis of one year all cash flows is added together equal to the sum of $2 million originally invested, then it is divided by the annual cash flow of $500,000. The calculation of the payback period would equal four years. After this time frame any financial proceeds will be considered profitable for the company. I conclude that the timeframe is adequate in comparison of the investment in this worthwhile investment financial venture for the company.

I would opt to take the $5,000 now, combine it with the existing saving of $10,000, and invest it at the 3% interest rate. The average 3% rate of return would produce earned interest of $463.64, which would exceed the three-year return of $250.00 by $213.64.

Therefore the annual interest rate is 8% and the effective annual rate compounded quarterly is 8.24%

The periodic rate of interest is 1.5% and the effective rate of interest is greater than 6%.

After the calculations you end up coming out with a rate of 14.87%. The third and final part of question three asks what rate you will need if the interest is compounded semiannually. All you have to do is double the amount of terms and you will come out with a lower number of 7.177%. Since the interest is compounded semiannually that means that you will need to times that number by two and you come out with your final number of 14.35%.

The semi-annual compounded interest rate is 5.2% (a six-month discount rate of 5.2/2 = 2.6%). (15 points)

Explain how the demand curves for normal products and for prestige products differ, what are demand shifts and why are they important to marketers? How do firms go about estimating demand? How can marketers estimate the elasticity of demand?

Implication: with same other factors, the nearer compounding frequency to +¡Þ, the smaller change in interest rate. Big difference occurs when nominal interate rates are compounded annually and quarterly.

(5 points) $100 invested for 10 years at 12% interest is worth more in FV terms than $200 invested for 10 years at 4% interest.

     Most People have money in a savings account and wonder how to figure out the actual interest rates or the APR (annual percentage yield). To find the amount of interest you would use this formula: P (principle) x R (rate) x T (time) = I (interest)