The annual interest rate is 12%. Find (a) the semi-annual rate, (b) the quarterly rate, (c) the monthly rate, and if possible, (d) the instantaneous rate.
Q: then the present value factor of the lumpsum is:
A: Time value of money (TVM) is used to measure the value of money at different point of time in the…
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A: In this question the compounding is continuous so the nominal rate needs to be converted to…
Q: If the nominal rate of interest is 10% per annum and there is quarterly compounding, the effective…
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Q: For an interest rate of 16 percent per year compounded semi-annually, determine the effective…
A: In this we have to determine interest rate for different situation.
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 effective equivalent annual interest rate is 18.1%, and interest is compounded quarterly (1…
A: Information Provided: Effective equivalent annual interest rate = 18.1% Compounding = Quartelry
Q: For an interest rate of 12% per year, compounded quarterly, the effective interest per six months is…
A: APR = 12% Number of compounding per year (m) = 4
Q: If the nominal annual interest rate is 15%, what is the effective interest rate when interest is…
A: In this question We require to calculate the effective interest rate from below details: Nominal…
Q: Find the nominal rate compounded monthly which is equivalent to 12% compounded quarterly. What is…
A: Interest rate = 12% compounded quarterly We need to find the nominal rate compounded monthly which…
Q: What is the effective annual interest rate when 12% per year is compounded quarterly? 0.13 or 0.23?
A: In this we have to calculate the effective interest rate annually.
Q: If the nominal rate is 16.5% per year compounded quarterly, what is the equivalent effective rate of…
A: Since you have asked a question with multiple parts, we will solve the first 3 parts as per policy.…
Q: What effective annual interest rate is equivalent to 9% compounded quarterly?
A: In this question we need to compute the effective annual interest rate compounded quarterly.
Q: A nominal interest rate of 11.333%, continuously compounded, yields an effective annual interest…
A: Effective annual rate = e^r - 1 where, r= nominal interest rate
Q: What is the effective annual rate of interest if $1200.00 grows to $1500.00 in two years compounded…
A: Effective Annual Rate: It is the real rate of return paid on a loan or earned on an investment,…
Q: If the effective annual interest rate is 15% then what is the equivalent annual rate compounded…
A: Effective annual rate (EAR) = 15% Number of compounding per year (m) = 4
Q: If the stated annual rate of interest compounded semi-annually is 12.5% then what is the equivalent…
A: Interest rate (APR) = 12.5% Number of compounding per year (m) = 2
Q: What effective annual interest rate to the nominal interest rate of 6% compounded monthly?
A: Interest rate (r) = 6% Number of compounding per year (m) = 12
Q: Which one is the approximate periodic interest rate % on a Treasury bill that you purchase for 4,908…
A: Future Value = present Value * (1+ rate * time)
Q: What is the annual effective interest rate equivalent to a nominal rate of 12 percent a year? Yanıt:
A: The effective rate of interest is an important technique in the case of multi-period compounding. If…
Q: For the following amount at the given interest rate compounded continuously, find (a) the future…
A: Given, P = $5300 r = 3.4% = 3.4/100 = 0.034
Q: If a bank was offering a nominal rate of return of 12% compounded monthly, what is the annual…
A: Formula: Annual effective rate = ( 1 + r / N )N - 1 R = rate of return N = Period
Q: Find the effective annual interest rate r of the given nominal annual interest rate. Round your…
A: Effective interest rate is interest rate considering the impact of compounding on interest rate.
Q: If the nominal or headline rate of interest is 24%, what is the effective annual rate i.…
A: The nominal rate of interest = 24% The effective rate is compounded semi-annually means 2 times a…
Q: What is the corresponding effective interest rate of 18% compounded semi-annually?
A: The effective interest rate is the real return earned on an interest-paying investment or savings…
Q: What is the rate of interest per interest period if the nominal rate of interest is 25% compounded…
A: nominal rate of interest = 25% Compounded monthly No. of period = 12
Q: What effective interest rate per year is equivalent to 19% per year compounded quarterly?
A: Formula for effective rate of interest = (1+i/n)n-1…
Q: that, for a three year period, the yearly inflation rate is 10% in the firstyear, 12% in the second…
A: In this we need to calculate the average inflation per year and from that we can calculate average…
Q: If the present value of $400 paid one year from now is $320, what is the one-year interest rate?…
A:
Q: If you are offered a nominal interest rate of 5% per annum, compounded monthly, what is the…
A: In this question we require to compute the effective annual interest rate from following details:…
Q: Find the nominal annual rate of interest compounded quarterly
A: Nominal rate of interest is provided by Banks. It is a rate that considers inflation. Compounding…
Q: If the interest rate is stated as 2.2% per 6 months compounded continuously, the effective annual…
A: Given: Interest rate = 2.2% Compounding continuosuly.
Q: What is the effective interest rate per quarter if the interest rate is 10% compounded monthly?
A: The real interest that an investor earns on the investment and a borrower pays on loan after…
Q: 1. If the nominal annual interest rate is 15%, what is the effective interest rate when interest is…
A: Details given are : Nominal interest rate = 15% We need to compute the effective interest rate when…
Q: Express the term Effective interest rate per payment period, quarterly payments with weekly…
A: The term Effective interest rate per payment period is the interest rate that is computed for…
Q: If the interest rate is stated as 2.2% per 6 months compounded continuously, the effective annual…
A: Here, Interest Rate Per 6 Month is 2.2% Therefore, Annual Interest Rate is: =2.2% ×2=4.4%…
Q: The effective annual rate (EAR) for a loan with a stated APR of 11% compounded quarterly is closest…
A: The real interest that an investor earns on the investment and a borrower pays on the loan after…
Q: Given an interest rate of 6.5 percent per year, what is the value at date t = 8 of a perpetual…
A: Annual interest rate = 6.5% Annual payment = $ 900
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 monthly effective interest rate? [ Select ] If the objective of these deposits is to…
A: Time period = 60 months Nominal interest rate = 6% Compounded monthly basis
Q: If the annual interest rate is 19%, what is the quarterly interest rate? 4+ decimals
A: Data given Annual Interest Rate (i)= 19% Simple Interest Rate -To convert annual interest rate into…
Q: Suppose that an investment promises to pay a real 9% annual rate of interest and inflation rate is…
A: The effective annual rate of interest is the real return on the savings account when the effects of…
Q: What is the effective annual rate of interest if $900.00 grows to $1200.00 in four years…
A: Using excel RATE function
Q: If the compounding frequency is monthly and the discount factor=0.62026, what is the value of the…
A: Let i(12) denote monthly interest rate Discount Factor = 1/(1+i(12)) 0.62026 = 1/(1+i(12)) i(12) =…
Q: If the interest rate is 12% compounded quarterly, what is the interest rate per conversion period?
A: The conversion period for the interest rate is the period in which the interest rate gets…
Q: What is the effective annual rate of a savings account with an annual interest rate of 5.9%…
A: Effective annual interest rate is referred as the interest rate which is adjusted for compounding…
Step by step
Solved in 2 steps
- Define the stated (quoted) or nominal rate INOM as well as the periodic rate IPER. Will the future value be larger or smaller if we compound an initial amount more often than annually—for example, every 6 months, or semiannually—holding the stated interest rate constant? Why? What is the future value of $100 after 5 years under 12% annual compounding? Semiannual compounding? Quarterly compounding? Monthly compounding? Daily compounding? What is the effective annual rate (EAR or EFF%)? What is the EFF% for a nominal rate of 12%, compounded semiannually? Compounded quarterly? Compounded monthly? Compounded daily?If the effective annual interest rate is 8%, what is the nominal annual rate if compounding is bi-monthly?An interest rate is quoted as 3.75% per year compounded quarterly, what is the effective daily rate?
- An interest rate is quoted as 3.75% per year compounded quarterly, what is the effective semi-annual rate?If the nominal rate of interest is 10% per annum and there is quarterly compounding, the effective rate of interest will be:Find the interest rates in the situation as: The effective annual interest rate is 11.02% and compounding is monthly. Find the nominal interest rate.
- For any given interest rate, ________compounding will yield the highest effective annual rate. a) annual b) monthly c) daily d) continuous e) semiannualYou are told that the nominal rate of interest is 3.46% per quarter year payable monthly. Calculate the equivalent effective annual rate of interest.A nominal interest rate of 11.333%, continuously compounded, yields an effective annual interest rate of how much?
- The discount factor corresponding to a 3-year continuously compounded interest rate is 0.765667. What is the corresponding continuously compounded interest rate? What is the corresponding quarterly compounded interest rate expressed at an annual rate?Find the effective annual rate associated with an 8% nominal rate when interest rate is compounded annuallyIf the nominal rate is 16.5% per year compounded quarterly, what is the equivalent effective rate of interest per three years
