A bank CD that pays 7.11 percent compounded semiannually. Calculate the effective annual interest rate (EAR).

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 credit union's Rate-Climber GIC pays rates of 2%, 2.5%, and 3% compounded semiannually in…

A: Future value of a present value is the value of that amount after taking into account the time value…

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: Which of the following has the most effective annual rate of interest?  A. 12.50 % compounded…

A: Effective annual rate (EAR) is the actual rate of interest earned after taking the effect of…

Q: A bank charges 1 ½% per month on the unpaid balance for purchases made with its credit card. This is…

A: The equivalent effective annual rate can be calculated through the compounding interest formula. The…

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: deposit that will earn 12%, compounded semiannually. Show the cash flow diagram, and compute the…

A:

Q: First National Bank offers two-year CDs at 9.16% compounded daily, and Citywide Savings offers…

A: First National Bank   r=9.16% compounded daily n= 365   Annual yield formula  is…

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: Determine the interest rate earned on a $1,500 deposit when $1,680 is paid back in one year.

A: Details given are : Present value of deposit = $1500 Future value of deposit = $1680 Time period = 1…

Q: Bank A pays 10% interest compounded annually on deposits, while Bank B pays 9% compounded daily.…

A: Bank A interest = 10% annually compounded Bank B interest = 9% daily compounded (365 days of…

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: get the effective rate of interest if the bank provides nominal rate of 6%  a. monthly b. daily…

A: The effective annual rate of return can be calculated with the help of EAR formula

Q: 1- Find the accumulative amount in a bank by down payment of 500000 ID now and ten cqual payments at…

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

Q: A bank offers the following interest rates on your deposit: (Draw the Cashflow) 10% per year,…

A: The effective annual rate (EAR) is the actual rate of interest after taking the compounding effect…

Q: find the nominal annual rate of interest compounded semi-annually that is equivalent to 8.6%…

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

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: First National Bank charges 7.5 percent compounded quarterly on its business loans. First United…

A: When comparing interest rate with different compounding period, effective annual rate is to be…

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: Assume the following annual payments of notes payable of Demi Company with 10% discount rate. 1st…

A: Time value of money concept says that a sum of money invested today will have more value in future…

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

A: formula for annual yield: AY=1+rnn-1where,r =rate n =frequency of compounding

Q: A bank pays a stated annual interest rate of 8 percent. What is the effective annual rate using the…

A: We require to compute the Effective annual rate in this question using monthly compounding.

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: A bank offers a lending rate of 10% p.a. compounded quarterly. What figure would they quote if they…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

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: San Juan Rural Bank is offering to the public their savings account scheme that pays 9.84%…

A: Interest rate = 9.84% We need to find annual rate which is quarterly compounded. Let the effective…

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: What is the annual payment on a 8-year, 8 percent, $52,000 note payable?

A: Definition:   Notes payable:  Notes Payable is a written promise to pay a certain amount on a future…

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: Determine the interest rate earned on an $800 deposit when $808 is paid back in one year.

A: In this question we need to compute the interest rate from following details : Initial deposit…

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: 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: first national bank charges 13.8 percent compounded monthly on its business loans. First United Bank…

A: Effective annual interest rate  = (1 + (nominal rate / number of compounding periods)) ^ (number of…

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: What is the effective rate of interest if a bank specified a nominal rate of 20% compounded…

A: In effective rate of interest the compounding are taken into consideration.

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: 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: First Bank of Midesto Medeque pays a 6.01% nominal rate of interest compounded weekly. What is the…

A: Step1: Calculating the effective rate of interest. We have,Effective rate of interest = [1+r/m]m…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.