If a credit card charges 1½% interest every month, what are the nominal and effective interest rates per year?

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: Suppose you deposit $469 per week in a bank account for 5 years. The interest rate(APR) is 7.2%,…

A: present value of annuity = P * {1-[1/(1+r)^n]/r} Where, r = rate of interest per period i.e. 7.2%/52…

Q: If you sign a discount note for $7,500 at a bank discount rate of 9% for 9 months, what is the…

A: Effective Annual Rate: The effective annual rate of interest is the actual or the real rate of…

Q: A person pays interest on a loan daily at a nominal annual interest rate of 16%. What is most nearly…

A: Effective annual interest rate (EAR) formula: EAR=1+RMM-1 where, R= nominal interest rate m =…

Q: The Men's Store charges 1.25 percent interest per month. What is the effective annual rate?

A: Every business firm suffers from the scarcity of funds. There are several investment…

Q: What is the interest earned in a savings account after 12 months on a balance of $4000 if the…

A: Since compounding is annually and we have to find the interest earned for 12 months, formula would…

Q: Suppose you have received a credit card offerfrom a bank that charges interest at 1.4% per…

A: Working note:

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: If you deposited $18000 and the bank is paying 7% interest compounded monthly, how much would be…

A: We know that the formula to calculate the accumulated value of cash flow is C*(1+r)n, where C is the…

Q: What will be the total interest earned on a 6%, $2,000 note receivable that is due in nine months?

A: Accounts receivable: Accounts receivable refers to the amounts to be received within a short period…

Q: How much do ten P 4,533 quarterly payments amount at present, if the interest rate is 2 compounded…

A: The amount of payments made at the beginning of each year is termed as an annuity due. It indicates…

Q: Suppose you have accumulated $22,000 in credit card debt. If the interest rate on the credit card is…

A: Present Value = Annuity * PVAF (Periodic rate, Number of Periods )

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: 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: What amount can you borrow if you make nine quarterly payments of $5,300 at a 16% annual rate of…

A:

Q: If the bank is paying 8% interest compounded quarterly, how much must you deposit today in your…

A: The formula to calculate the present value of future cash inflow is C/(1+r)n, where C is the cash…

Q: If $14,000 is borrowed for 2 months and $82 is paid, then the annual simple interest rate is ____

A: Interest = p * r * t Interest = $82 principal = $14,000 r = rate of interest  t = time in years = 2…

Q: A bank is offering 10% compounded quarterly. If you put $200 in an account, how much will you have…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: If your credit card’s APR is 24% compounded daily, what isthe effective annual interest rate that…

A: Given information: APR is 24% compounded daily

Q: Suppose are going to make monthly deposits into an account with an annual interest rate of [8] 2.5%…

A: For calculating the monthly deposit as ordinary annuity; the $1,000,000 amount shall be taken as 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: how much money must you put in a savings account today?

A: PV is the money value in today’s terms which is to be received at some future date whereas FV is the…

Q: What is the interest earned in a savings account after 12 months on a balance of $1000 if the…

A: Because a dollar on hand now is worth more than a dollar promised in the future, the time value of…

Q: Suppose you deposit $22.000 in an account today that pays 6% interest, compounded annually. How long…

A: Information Provided: Initial deposit = $22,000 Future value = $76,000 Interest rate = 6% compounded…

Q: f the nominal rate is 11.5% per year compounded continuously, what is the equivalent effective rate…

A: Nominal rate = 11.5% compounded continuously We need to find bi-monthly rate, where there are 24…

Q: John Johnson borrowed $15,550 from a bank for three years. If the quoted rate (APR) is 5.20 percent,…

A: In the given question we need to compute the effective annual interest rate (EAR) if the nominal…

Q: If $900 is borrowed and the interest after 6 months is $63, what is the annual interest rate for a…

A: The term simple interest refers to the borrowing arrangement in which the interest is only charged…

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 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 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: How many months will it take to pay off a $525 loan, with monthly payments of $15 at the end of each…

A: Compounded quarterly means the interest on the outstanding balance is calculated quarterly and added…

Q: Suppose you deposit $125 on the first of every month for 240 months, and the bank credits interest…

A: The term annuity depicts a stream of equivalent periodic cash flows over a specific time duration.…

Q: You currently have $20,000 in the bank.  The monthly interest rate is 0.5%.  What equal amount could…

A: In this we have to calculate the present value FACTOR monthly and from that we can get monthly…

Q: you receive a credit card offer that charges interest at 1.75% per month compounded monthly. What is…

A: Information Provided: Interest rate = 1.75% Compiunding = monthly

Q: Suppose that $ 1,500 is placed into a bank account at the end of each month over the next 8 years.…

A: Annuity refers to the fixed periodic payments which are paid monthly, quarterly, semi-annually or…

Q: You have just received an offer from a bank for a credit card with a quoted rate, or APR, of 18…

A: In the given question we need to compute the Effective annual rate (EAR).

Q: What is the effective annual interest rate for 10.5% compounded   (a) Semiannually ? (b) quarterly…

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

Q: e note has been outstanding 10 months, what is the annual interest rate on that note?

A: Note payable refers to the long term liabilities which reflects the sum value of money a company…

Q: You have maxed out your $10,000 credit card, which is being charged 12.8% annual interest compounded…

A: Calculation of minimum monthly and weekly payments:Answer:The minimum monthly payment and weekly…

Q: Money borrowed today is to be paid in 9 equal payments at the beginning of each quarter. If the…

A: Compound Interest: Compound interest is calculated using the principal of a loan or deposit–as well…

Q: the annual interest rate on a credit card is 12.99%. If a payment of $300.00 is made each month ,how…

A: Unpaid balance (PV) = $2446.16 Interest rate = 12.99% Monthly interest rate (r) = 12.99%/12 =…

Q: If $800 is borrowed and the interest after 6 months is $44, what is the annual interest rate for a…

A: Principal Amount = $800 Time Period = 6 Months Interest = $44

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 person pays interest on a loan semi - annually at a nominal annual interest rate of 16%. What is…

A: effective annual interest rate (EAR) formula: EAR=1+RMM-1 where, R= nominal interest rate M =…

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…