Answered: OYou are told the effective interest…

OYou are told the effective interest rate on an account is 9.1.%. if the interest is compounded cantinuous ly: What percen tage I four decimal places) is the annual rate for the account?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Related questions

Q: he effective annual interest rate is 15%. A) Assume interest is compounded monthly. What is the…

A: The effective annual interest rate is the real return on a savings account or any interest-paying…

Q: Which of the following compounding rates is equivalent to an effective interest rate of 2.75% p.a.…

A: The effective interest rate also referred to as the annual equivalent rate or the effective rate is…

Q: An interest rate of 10% compounded monthly is given, compute for the interest rate per period? O…

A: The periodic rate equals the annual interest rate divided by the number of periods

Q: How long would you have to wait for a deposit of $1,625 to earn $34 in interest? Assume that the…

A: Interest = Principal * Rate * Time

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: Your bank account pays interest with an EAR of 4% What is the APR quote for this acount based on…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

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: If the effective annual interest rate is 14%, what is the nominal annual rate if compounding is…

A: The Bi-monthly compounding means the interest is compounded in every two month and the interest…

Q: If the same two $15,000 deposits are made (at time 0 and end of year 4) into a differ account that…

A: i) If $15,000 invested at time 0 Considering time period is 5 years Solved using Financial…

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

A: Working note:

Q: What is the equivalent rate of interest (in %) for a discount rate of 7.9% for 77 days? Round your…

A: Interest rate is referred as the percentage of the principal charged through the lender regarding…

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: The principal P is borrowed and the loan's future value A at time t is given. Determine the loan's…

A: Simple interest is defined as an easy as well as quick method for the calculation of an interest on…

Q: are due now, in four years, and espectively. What is the equiva -um of money due three and a now if…

A: in this we have to calculate present value of all loans and find out future value.

Q: If you borrowed $1,175 for 11 months at a simple interest rate of 5.00% per annum, how much interest…

A: Interest = Principal * Rate * Time

Q: An amount of P dollars is borrowed for the given length of time with the amount F due at the end of…

A: given data borrowed amount (p)= 2400 due amount (f) = 3744 time period t = 7 years interest rate =…

Q: Use the given annual interest rate r and the compounding period to find i, the interest rate per…

A: Information Provided: 5.45% compounded monthly

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: Which of the following compounding rates is equivalent to an effective interest rate of 2.75% p.a.?

A: When the compounding frequency per year is not 1 then in that case the stated interest rate will not…

Q: What is the effective interest rate per month if the interest rate is 9% compounded continuosly?

A: The effective interest rate is the actual return on a savings account or any other interest bearing…

Q: The annual interest rate is 12%. Find (a) the semi-annual rate, (b) the quarterly rate, (c) the…

A: semi-annual rate is the rate that is compounded twice a year (i,e) for every six months is called…

Q: A rate of 2% per quarter compounded quarterly is closest to what annual compounded interest rate?…

A: The annual interest rate is computed after accounting for the number of periods of compounding and…

Q: Savings institutions often state a nominal rate, which can be thought of as a simple annual interest…

A: Effective rate refers to actual return that an investment will generate in a period after…

Q: Suppose you deposit $ 1296 today and your account will accumulate to $ 5637 in 9 years. What is the…

A: Maturity Amount, A = $ 5637Principal deposited, P = $ 1,296Time period, T = 9 years

Q: Calculate the simple interest earned. Round to the nearest cent. P = $2250, r = 4.00% monthly, t =…

A: A method of computing interest amounts in which the compounding effect was not considered by the…

Q: Savings institutions often state a nominal rate, which can be thought of as a simple annual interest…

A: The effective annual interest rate refers to the rate that is actually earned on an investment or…

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: What is the effective interest rate corresponding to a nominal annual rate of. (Round your…

A: Whenever the impacts of compounding over time are considered, the effective annual interest rate is…

Q: Mr. Hyson borrowed $15,550 from the bank for 3 yrs. If the quoted rate (APR) is 6.55% and the…

A: The Effective Annual Rate (EAR) for daily is calculated by compounding daily rate wit the number of…

Q: If the balance of an account (which earns interest quarterly) is $9,734.33 at the beginning of the…

A: Please refer next sheet

Q: effective interest rate

A: Formula: effective interest rate= [1+ interest rate/period)^ period]-1 *100

Q: An interest rate of 10% compounded monthly is given, compute for the interest rate per perio 0.83% O…

A: Interest Rate per period = Annual interest rate / no. of compounding period

Q: Use the given annual interest rate r and the compounding period to find i, the interest rate per…

A: GIVEN, annual interest rate (r) = 5.45% frequency of compounding (m) =12 (monthly compounding)

Q: Find the effective rate of interest for an account with a stated rate of 14% compounded monthly.…

A: Effective annual interest rate is referred as the interest rate which is adjusted for compounding…

Q: The amount of simple interest on a deposit varies jointly with the principal and the time in days.…

A: The simple interest can be calculated with the help of simple interest function

Q: If the interest bearing account yielded an effective interest rate of 9% what would nominal rate,…

A: The question is based on the concept calculation of effective interest rate (EIR) of quarterly…

Q: What is the effective annual interest rate in each situation? Show and explain all supporting…

A: Effective annual interest rate is the actual Interest which is paid or received by taking into…

Q: The principal P is borrowed at a simple interest rate r for a period of time t. Find the simple…

A: Given: Principal amount (P) = $9000 Interest rate (r)=6.5% = 0.065 Time period = 18 months = 1.5…

Q: An investment account earns 6.9% Interest, compounded continuously. What is the effective annual…

A: Given: Interest rate is 6.9%

Q: Suppose you deposit $5300 now into an account that earns 3.1% APR, compound daily. Round arewers to…

A: Future Value(FV) is compounded value of current amount at future date computed using interest rate.

Q: What is the Effective Annual Rate (EAR) on a deposit account with a stated Annual Percentage Rate…

A: The EAR is the actual rate of return earned on the investment whereas APR is simply a stated rate of…

Q: What is the effective interest rate per payment period for an interest rate of 12% compounded…

A: The effective rate per period is the rate per period when the nominal rate is compounded at a…

Q: Assume that you take out a $2000 loan for 30 months at 9% APR. What is them onthly paym ent? (Round…

A: The present value of all the monthly payments discounted at the interest rate charged under the loan…

Q: Your bank account pays interest with an EAR of 4%. What is the APR quote for this account based on…

A: The annual interest rate that is charged by the lenders or at which the investors earn additional…

Q: Suppose à priñčipal Generate a table of the corresponding effective interest rates. (ruond to 3…

A: Effective interest rate is the interest rate considering the impact of the compounding on the…

Q: If the nominal rate of interest paid on a savings account is 2% compounded monthly, what is the…

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

Question

How do I find the annual percentage rate with the effective interest rate?

O You are told the effective interest rate on
an
account
is
9.1%. ,
if
the
interest is
compounded cantinuously. What is the annual
percen tage
( four decimal places)
rate
for
the accaunt?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Suppose the real rate is 3.5 percent and the inflation rate is 2 percent. What rate would you expect to see on a Treasur bill? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g 32.16.)
If Treasury bills are currently paying 6.35 percent and the inflation rate is 1.6 percent, what is the approximate and the exact real rate of interest? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) A. approximate real rate B. exact real rate
If Treasury bills are currently paying 6.45 percent and the inflation rate is 1.4 percent, what is the approximate and the exact real rate of interest? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) approximate real rate: exact real rate:
If the annual interest rate is 12.9% and the dollar amount compounds daily, you would ( a. multiply b. divide) the interest rate by (a. 1 b. 12 c. 52 c. 365) and you would (a. mul tiply b. divide) the number of time periods by (a. 1 b. 12 c. 52 d. 365)
which one is correct please confirm? QUESTION 31 What is the effective rate of interest on a CD that has a nominal rate of 9.5 percent with interest compounded monthly? a. 9.86% b. 9.93% c. 10.02% d. 9.74%
Suppose we observe the 3-year Treasury security rate (1R3) to be 8 percent, the expected 1-year rate next year—E(2r1)—to be 4 percent, and the expected one-year rate the following year—E(3r1)—to be 6 percent. If the unbiased expectations theory of the term structure of interest rates holds, what is the 1-year Treasury security rate, 1R1? (Round your answer to 2 decimal places.)
If the annual interest rate is 8%, what is the daily interest rate that would be used as the "r" in the time value of money equation? Hint: the equation uses the decimal equivalent of the percent Enter your answer to four decimal places.
Using the following information, determine the real rate of interest: Rate % inflation 0.53 T-bill 5.00 10y T-Bond 6.00 10y AAA Corporate 6.41 10y AA Corporate 7.52 note: your answer should be to 2 decimal places. So, if your answer is 3.253%, for example, then enter 3.25 without the percent sign.
What would you expect the nominal rate of interest to be if the real rate is 3.8percent and the expected inflation rate is 6.8 percent? The nominal rate of interest would be ______%. (Round to two decimal places.)
If the annual interest rate is 7%, what is the monthly interest rate that would be used as the "r" in the time value of money equation? Hint: the equation uses the decimal equivalent of the percent Enter your answer to four decimal places.
Assume the following: Spot USDBRL = 5.0500 1YR USD Money Market Rates = 1.50% 1YR BRL Money Market Rates = 9.00% What is the 1YR USDBRL forward rate? (Recall that Money Market Rates are quoted as annualized rates)
Find the effective rate to the nearest hundredth for nominal interest rate. 3% compounded continuously

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS