A bank CD that pays 6.86 percent compounded daily (on a 365-day per year basis). Calculate the effective annual interest rate (EAR).

Q: A credit card company compounds monthly and charges an interest of 1 ½ % per month. What is the…

A: Effective Interest Rate It is a rate that discounts the approximate future cash flows over the…

Q: Molly Slate deposited $35,000 at Quazi Bank at 6% interest compounded quarterly. What is the…

A: “Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the…

Q: A bank pays 4% nominal annual interest on special three-year certificates. What is the effective…

A: Effective Annual Rate is a modified rate of return where it considers the compounding effect.…

Q: ARAB Bank pays 0.074 percent, compounded weekly (based on 52 weeks), on an 8-month certificate of…

A: The effective annual rate of interest is the real return on the savings account when the effects of…

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: ARAB Bank pays 0.07 percent, compounded weekly (based on 52 weeks), on an 8-month certificate of…

A: The future value of the cash flow is the future worth of a cash flow at a certain rate of interest…

Q: For a Federal Credit Union that provides a compounded quarterly interest rate of 8 percent per year,…

A: Federal credit union is referred as the credit union as per the regulatory comprehension of National…

Q: Elliott Credit Corp. wants to earn an effective annual return on its consumer loans of 17.1 percent…

A:

Q: investment

A: Introduction: The effective annual interest rate can be defined as a real return which is earned on…

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: Vandermark Credit Corp. wants to earn an effective annual return on its consumer loans of 15.25…

A: Effective annual rate = [1+Annual Rate/365]^365 - 1

Q: Assuming a 360-day year, the interest charged by the bank, at the rate of 12%, on a 90-day,…

A: Interest charged = Notes Payable x Interest rate x 90/360

Q: What effective annual rate can a bank earn on an APR of 10.5 percent, compounded monthly? Can the…

A: Given information: Annual percentage rate : 10.5% Compounding frequency : 12

Q: nterest rate of 10% pa with semi-annual compounding. Note that another way of stating this rate is…

A: In this we need to calculate the effective interest rate.

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: First National Bank charges 15 percent compounded quarterly on its business loans. First United Bank…

A: The effective annual rate of interest is the actual or the real rate of interest paid or received…

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: The value of $60 deposited in a bank for six years at a rate of 10% compounded annually is:

A: Future value = Present value(1 + Rate)^Time

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: The Cardex Credit Card Company charges a nominal 24 percent interest on overdue accounts, compounded…

A: Effective interest rate is the interest rate that is earned or paid after considering the…

Q: You are paying an effective annual rate of 15.33 percent on your credit card. The interest is…

A: Calculation of annual Percentage of rate is shown below:

Q: while at the bank, you see a brochure with two saving account options. One pays interest at 4.35%…

A: The real interest that an investor earns on the investment and a borrower pays on loan after…

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: A bank quoted 10% annual interest rate. If the bank compounds the interest rate quarterly, what…

A: Quarterly rate = Annual rate / Number of quarters in a year Quarterly rate =10% /4 Quarterly rate…

Q: A certificate of deposit (CD) is an agreement between a bank and a saver in which the bank…

A: It is very important for the investor to compare the annual yields of the investment instead of…

Q: Your local bank offers 4-year certificates of deposit (CD) at a 12 percent annual nominal interest…

A: Future Value: The future value is the value of annuity or the sum lump amount after a certain period…

Q: A bank pays interest quarterly with an EAR of 7%. What is the periodic interest rate applicable per…

A: Interest rate can be of two different types. 1. Effective annual Interest 2. Nominal Annual…

Q: The bank is offering to the public their savings account scheme that pays 9.84% compounded annually.…

A: Annual rate (r) = 9.84% compounded annually Let the quarterly compounded rate = i Number of…

Q: Elliott Credit Corp. wants to earn an effective annual return on its consumer loans of 14.5 percent…

A: The formula used as follows: APR=m×1+EAR1m-1

Q: Assuming a 360-day year, the interest charged by the bank, at the rate of 6%, on a 90-day,…

A: Interest charged by the bank = Amount of notes payable x rate of interest x no. of days / 360

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: You are paying an effective annual rate of 8.974 percent on your credit card. The interest is…

A: Answer  Effective Rate = (1 + Nominal Rate / n)n - 1 effective annual rate = 8.974% Number of…

Q: A bank applies a semi-annually capitalized nominal rate of 11.8% for an investment. Calculate…

A: The effective rate for any period refers to the actual proportionate cost which will be paid for…

Q: A credit card company charges an interest rate of 1.375% per month on the unpaid balance of all…

A: Effective rate of interest is the real return on savings or any interest paying investment when…

Q: City Bank offers a 7-year CD with a nominal rate of interest of 7%. If compounding occurs…

A: continuous compounding effective annual rate =  e^r - 1 where, r = rate of interest i.e. 7% or 0.07…

Q: Federal Savings Bank is offering a 6-month CD (certificate of deposit) with a rate of 4.5%…

A: The real interest that an investor earns on the investment and a borrower pays on loan after…

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: 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: Suppose you have received a credit card offer from a bank that charges interest at 1.1% per quarter,…

A: The nominal rate is the rate that the financial institution quotes when giving out or receiving…

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: What is the effective interest rate of a simple discount note for $32,000, at an ordinary bank…

A: Given: Principal amount =$32000Discount rate =13%Time duration =10 daysNumber of days in a year =360…

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…