A bank pays 5% with daily compounding on its savings accounts. Should it advertisethe nominal or effective rate if it is seeking to attract new deposits?
Q: A bank offers all savings accounts 5% interest compounded annually. If one account has a principal…
A: An account doubles when the present value becomes 2 times of itself. In order to become two times,…
Q: If you deposited P1,000 a couple of years ago in a bank that pays the interest bimonthly. After…
A: The effective rate implies for percentage figure which shows proportion of increase that will occur…
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A: Loan is the value which is borrowed from the other sources like banks and this amount repaid later…
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A: Effective annual interest rate(EAR) refers to the actual interest rate which is received on deposits…
Q: A depositor currently has $6,000 and plans to invest it in an account that accrues interest…
A: Formula: Future value = Present value x ( 1 + r )N R = Rate of interest N = Number of years
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A: Effective annual rate is defined as the actual rate that is earned on the investment. It shows the…
Q: A bank charges 1 ½% per month on the unpaid balance for purchases made with its credit card. This is…
A: The equivalent effective annual rate can be calculated through the compounding interest formula. The…
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A: Savings deposit account is a financial service widely used by depositors to save their income. It is…
Q: Elliott Credit Corp. wants to earn an effective annual return on its consumer loans of 17.1 percent…
A:
Q: Which of the following bank accounts has the highest effective annual return O a. An account that…
A: The effective annual return or effective annual interest(EAR) is the actual interest paid or earned…
Q: Vandermark Credit Corp. wants to earn an effective annual return on its consumer loans of 15.25…
A: Effective annual rate = [1+Annual Rate/365]^365 - 1
Q: Credit card issuers must by law print the annual interest rate they charged borrowers. If the annual…
A: Annual interest rate = 15% Compounding = Monthly Number of compounding per year = 12
Q: If the bank states an effective interest rate of 13.5% per year, and there are 52.15 weeks, how much…
A: Formula for calculating weekly interest rate is:
Q: a bank charges one and one-half percent per month on the unpaid balance for purchases made its…
A: Present value is the sum of the current value of money of future cash flows. It is also known as a…
Q: PLEASE HELP ASAPThe client has made a deposit in the bank in the amount of 10,000$. The duration of…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Bank A pays 5% interest compounded annually on deposits, while Bank B pays 4.8% compounded monthly.…
A: Effective annual rate(EAR) is the rate that is actually earned or paid on investment or loan. It…
Q: Find the equivalent present worth of the cash receipts in the accompanying diagram, where i = 8%…
A: We know that the formula to calculate the present value is I/(1+i)n, where I is the cash flow that…
Q: It is now January 1, 20x8. Today you will deposit P100,000 into a savings account that pays 8%. a.…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: A bank offered a commercial customer a one-year loan. A discounted note with a nominal rate of 13%…
A: A loan charges a percentage of the principal as interest to a borrower (the amount borrowed). The…
Q: If a nine-month term deposit at a bank a simple interest rate of 9% per annum, how much will have to…
A: Simple interest: As the name indicates it is a simple interest computed on the amount of principal.…
Q: In order to earn 14% simple interest on a 90 day short term loan – what discount rate should be…
A: Formula to be Used:- Simple Interest = Principle ×Rate × timeperiod100 Amount = Principle +SI Future…
Q: You have a 2-year certificte of deposit in the bank. It is paying 6% annual interest, compounded…
A: Certificate of Deposit (COD) is a definite term deposit facility which provides higher interest than…
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: t is now January 1, 2x16, and you will need P100,000 on January 1, 2x20. Your bank compounds…
A: The value of money would possibly change with time. The money that is received at present will have…
Q: Find the equivalent present worth of the cash receipts in the accompanying diagram, where i = 8%…
A: Present Value refers to the value of cash flows today which is to be received at some future time…
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A: It is very important for the investor to compare the annual yields of the investment instead of…
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: 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: Barcain Credit Corporation wants to earn an effective annual return on its consumer loans of 16…
A: Formula for effective interest rate can be used to compute stated interest rate as: r = (1+i/n) n –…
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: f a nine-month term deposit at a bank earns a simple interest rate of 9% per annum, how much should…
A: A term deposit is a fixed-term investment that includes deposits of money into an account at a…
Q: Bank A pays 2% interest compoundedannually on deposits, while Bank B pays 1.75% compounded daily.a.…
A: Formula for EFF is: EFF = (1+r/n)^n - 1 where r is the nominal rate of interest & n is the…
Q: .A bank offers a 272- day discounted loan at a simple discount rate of 12%. (a) How much money would…
A: The discount on loan is given and that discount on loan is the interest being charged on the loan…
Q: The Bank pays $1,200 in a bank deposit after a period of 12 years at an annual interest rate of 6.5%…
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Q: If a Commercial Bank A offers its savers a 10.3% annual interest rate and pays interest annually,…
A: ASSUMING THE PRESENT VALUE (INVESTMENT)= 1000 FIND OUT FUTURE VALUE OF INVESTMENT ANNUALLY…
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: In other words, how much do you have to deposit now
A: Present Worth: It is the present value of the cash flows discounted over a given period at a…
Q: 2. If a nine-month term deposit at a bank earns a simple interest rate of 9% per annum, how much…
A: Given rate of interest = 9% Required interest = 225 Period = 9 months Interest under simple 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: If you deposit $15,000 at EOY 1, $10,000 at EOY 2, and $5,000 at EOY 3 into a savings account which…
A: Deposit at end of year 1 = 15000 Deposit at end of year 2 = 10000 Deposit at end of year 3 = 5000…
Q: If a nine month term deposit at a bank earn a simple interest rate of 9% per annum, how much should…
A: Term deposit is a way in which the person locks his amount or we can say sum of money for a specific…
Q: f the bank advertises 10.21% accounts that yield 9.84% annually. Find how often is the interest…
A: Given: Annual Percentage Rate: 10.21%Effective Annual Rate: 9.84% Required :Compute how often the…
Q: Bank A pays 4% interest compounded annually on deposits, while Bank B pays 3.5% compounded daily. a.…
A: Effective Annual Rate is the equivalent interest rate for nominal rate which is compounded multiple…
Q: You come across two banks offering different compounding interest rates. Public Bank offers 12…
A: Effective Annual Rate: The effective annual rate of interest is the actual or the real rate of…
Q: A bank offers a Certificate of Deposit (CD) at a rate of 6% compounded monthly. Another bank offers…
A: Certificate of deposits(CDs) is a kind of debt instrument having a short-term to mid-term maturity…
Q: Bank A offers a nominal annual interest rateof 6.5% compounded daily, while Bank B offerscontinuous…
A: The future value of the cash flow is the future worth of a cash flow at a certain rate of interest…
A bank pays 5% with daily compounding on its savings accounts. Should it advertise
the nominal or effective rate if it is seeking to attract new deposits?
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- a bank charges one and one-half percent per month on the unpaid balance for purchases made its credit card. this is equivalent to what effective annual interest rate?A bank offers a Certificate of Deposit (CD) at a rate of 6% compounded monthly. Another bank offers 5.90% compounded daily. Which rate is better for the investor?get the effective rate of interest if the bank provides nominal rate of 6% a. monthly b. daily c. quarterly
- A bank pays a simple interest rate of 4.1% on 30 to 179-day GICs of at least $100,000. What is the effective annualized rate of return:a) On a 40-day GIC?b) On a 160-day GIC?The bank is offering to the public their savings account scheme that pays 9.84% compounded annually. How much is it if it is compounded quarterly?Pacific Bank pays a 9.75% nominal rate on deposits, with monthly compounding. What effective annual rate (EFF%) does the bank pay? Select the correct answer.
- Bank A pays 10% interest compounded annually on deposits, while Bank B pays 9% compounded daily. Based on the EAR (or EFF%), which bank should you use?The Bank pays $1,200 in a bank deposit after a period of 12 years at an annual interest rate of 6.5% How much should you deposit in your bank account now Future Value ? Discount Rate/Period ? No. of Periods ? Present Value ?Bank America offers a stated annual interest rate of 5.0 percent, compounded quarterly, while Bank USA offers a stated annual interest rate of 5.10 percent, compounded monthly. In which bank should you deposit your money?
- A bank charges Money Co. an interest rate of 12% compounded quarterly on its line of credit. If the effective interest rate were to increase by 2.80%, calculate the new interest rate compounded quarterly. A bank has decided to set its interest rates to compound monthly on all deposits in order to give customers the same benefits as its current offering of 5.19% compounded quarterly. At what value should the monthly compounded interest rate be set?Elliott Credit Corp. wants to earn an effective annual return on its consumer loans of 17.1 percent per year. The bank uses daily compounding on its loans. What interest rate is the bank required by law to report to potential borrowers?. If a bank advertises a savings account that paysan 8% nominal interest rate compounded continuously, what is the effective annual percentage rate
