The difference between the nominal interest rate and the effectiveinterest rate.

Q: Distinguish the nominal rate of return from the real rate of return.

A:

Q: What is market interest rate?

A: The interest rate in which borrowers and lenders borrow and lend money to each other is called…

Q: How can we calculate an Effective Interest Rate Based on a Payment Period?

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

Q: . What is the term structure of interest rates?

A: Answer: The term interest rate structure is the pattern of necessary returns, also referred to as…

Q: What is a compounding interest rate?

A: Interest rate is the rate charged by the lender for the amount of money lend by him. Lender can be…

Q: What the different between rate interest و interest value ؟؟!!

A: The rate interest indicates the cost of borrowing or earnings on deposit in the percentage of the…

Q: what is the interest rate

A: Interest rate is the rate at which the bank or any other lenders charges from the borrowers for…

Q: a. what is the difference between the discount rate used for net present value and the internal rate…

A: Discount rate used for net present value is rate which investor want to earn from a project . It is…

Q: interest

A: Exact Interest = P*r*(t/365) Ordinary Interest = P*r*(t/360)

Q: direct and indirect relationships between balance of payment and inflation rate.

A:

Q: What is the Times-interest·earned ratio?

A: It is important to analyze whether a company has ability to pay off its debts. Means, it is…

Q: What is the rela1ionship between Annual  Percentage Rate and the interest period?

A: Answer: Annual percentage rate represents the interest rate which also takes additional payments…

Q: Interest rate that include an inflation premium are referred to as

A: In the world of finance you will often come across the term nominal rate and real rate.

Q: How to calculate Present Value Interest Factors?

A: PVIF is known as Present Value Interest Factor. PVIF refers to a factor that is very useful in…

Q: Identify the MARR (or external interest rate)?

A: A minimum acceptable rate of return (MARR) is the all-out advantage that a speculator wants to pick…

Q: What is interest rate?

A: Answer: At a particular situation, an interest rate determines how much money a borrower promises to…

Q: What is going interest rate?

A: An interest rate is the rate which is applicable on loan and the borrower has to pay the interest…

Q: What are the components of an interest rate?

A: Interest rate refers to the net charges that a lender makes on the principal amount provided to the…

Q: When is it recommended to compute the effective interest rate per payment period?

A: When there is a compounding of interest, then the EIR per payment period is recommended. As it is a…

Q: How is Compound Interest calculated?

A: Compound interest refers to the addition of interest amount to the principal. The concept of…

Q: Interest cost is calculated by multiplying the______by the ______?

A: Interest cost is calculated by multiplying the  Principle amount by one plus the annual interest…

Q: ond interest rates may differ from market interest rates because:

A: Bonds are priced by discounting future cash flows. Future cash flows include coupons and par value…

Q: What does the term structure of interest rates indicate?

A: Interest is an additional amount which is received over the investment amount during the period. It…

Q: When is the Times-Interest-Earned Ratio?

A: The TIE is a calculation of a firm's ability to reach its debt liability based on its current…

Q: How is the Equivalence Calculations made with Effective Interest Rates?

A: The formula for Effective annual rate is  Where, r - rate of return n - number of compounding.…

Q: What is the Rate of Interest?

A: Given  P= 10000 A=5000 n=1year r=?

Q: What is the Net Interest Margin (NIM)

A: Net Interest margin (NIM) is percentage of difference between interest income earned on loans and…

Q: Define the term the effective interest rate covering the payment period?

A: Interest rates can be of two types- Simple interest rate- This is the interest rate stated in the…

Q: Question 1 (a) Clearly distinguish between nominal interest rate and effective interest rate.

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…

Q: What is “imputed interest”? In what situations is it necessary to impute an interest rate for notes…

A: Imputed Interest: According to the Internal Revenue Service (IRS), an imputed interest is an…

Q: Why there is a difference between the interest rate and the APR

A: Interest rates and APR are two phrases that are sometimes used interchangeably to refer to…

Q: How is the PW analysis dependent on the rate of interest used for the PW computation?

A: Net present value (or) PW analysis is one of the capital budgeting techniques. When a company is…

Q: Differences between Accrued Interest and Payments?

A: Answer: An accrued interest is nothing but interest on a loan or an interest on bond that has been…

Q: How VAT affects the interest rate?

A: Solution-Value Added Tax  A value-added tax (VAT) is a consumption tax placed on a product whenever…

Q: The nominal interest rate is

A: Introduction: Nominal interest rate can be defined as the rate of interest that is advertised or…

Q: How does the interest rate adjust?

A: Interest rate levels are based on two factors- supply and demand of credit: an increase in the…

Q: How are Effective Interest Rates calculated?

A: Effective interest rate is the interest earned on the investment or saving account.

Q: What is the difference between a fixed rate and an adjustable rate money market instrument?

A: Money Market instruments are the financial instruments available to the investor for the short term…

Q: Describe the methods of calculating interest?

A: In the finance industry, every decision revolves around the interest rate. This is a crucial…

Q: Distinguish between the real risk-free rate of interest, r*, and the nominal, or quoted,risk-free…

A: The interest rate is the cost of carry some loan or money. It will provide the income to the lender…

Q: Define implicit rate of interest.

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: What is the Cumulative interest payment?

A: Cumulative interest payment is the sum of all previous interest payments that are made for an…

Q: How is NPW used as a Function of Interest Rate?

A: Present value computes the existing value of future benefits by discounting future worth with a…