What is the compound amount factor (CAF) if I is the interest rate per year, m is a number of periods per years, n is the number of periods and the interest rate is paid more than once in a year? i a) | 1+- i b) | 1+ - i m c) | 1+

What is the compound amount factor (CAF) if I is the interest rate per year, m is a number of periods per years, n is the number of periods and the interest rate is paid more than once in a year? i a) | 1+- i b) | 1+ - i m c) | 1+

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

ChapterB: Differential Calculus Techniques In Management

Section: Chapter Questions

Problem 7E

See similar textbooks

Related questions

Q: J 7 What is the ordinary simple interest on 7000 for 8 mos and 15 days if the rate of interest is…

Q: In five years, a salary of $56,000 per year with a 5% growth due to cost-of-living adjustment in the…

A: There are two cases, first in which income is received for four years and there is an increment in…

Q: If the difference between Simple Interest and Compound Interest on a certain sum of money in 2 years…

A: The simple interest rate is calculated using the following formula: SI=P×R×T100 where, SI represents…

Q: If you borrowed P10000 from a bank with 18% interest per annum, what is the total amount to be…

A: Amount to be repaid = principle amount + interest payment

Q: Suppose an amount of P300,045 is invested in 19 years at 7.37% per year. How much is the earning of…

Q: An amortization of a debt is in a form of a gradient series of P20,000 on the first year, P19,500 on…

A: Future value is basically the amount of money that, if invested now, will grow in value over time at…

Q: When interest is calculated only on the principal amount of the investment, it is known as…

A: Mainly, there are two types of interest rates, simple interest and compound interest.

Q: The CEO of a company is to give each nominal interest of his 50 employees a bonus. How much is…

A: The total holiday bonus is (50)($1000) = $50,000 Use the uniform series sinking funds discount…

Q: A discount interest loan is a loan arrangement where the interest and any other related charges are…

A: The given information: Loan for 1 year is 10,000 The monthly payment is 1,400 Net fund the lender…

Q: A person purchased a new car for $26,200 and financed the entire amount. Suppose that the person can…

A: Given, Purchsed car : $26,200Afford to pay $200 per monthRate of interest : 8%

Q: What is the compound amount factor (CAF) if I is the interest rate per year, m is a number of…

A: The compound amount factor is being used to calculate a future single sum being F which is…

Q: Engr. Elmundo borrows P 64,000 from a loan association. In repaying this debt he has to pay P 4,000…

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

Q: What is the present value or price of a 10 year P20,000 annuity with an interest rate of 5% a.…

A: Compound interest, also known as Interest on Interest, is interest that is added to the interest…

Q: Determine the ordinary and exact simple interest on P5,000.00 for the period of January 15 to June…

A: The number of days between 15th january to 20th june, 1993 is 156. So the time will be 156/365…

Q: State the value of C that makes the following two cash flow transactions economically equivalent at…

A: Cash flow alludes to the net equilibrium of money moving into and out of a business at a particular…

Q: In an effort to have enough money to finance his passion for top-level off-road racing, a mechanical…

Q: A man deposits P 1,000 at the end of each month for 3 years at a nominal rate of 12% compounded…

A: Given nominal interest rate = 12 % compounded monthly Effective rate = (1 + 12%/12)^1*12 – 1 =…

Q: Suppose that Rajiv borrows $50,000 at 5% per year to purchase equipment for his business. Complete…

A: Compound interest is the interest which is calculated on the initial principal, and it also includes…

Q: True or False 1. The future worth of a perpetuity from one (1) to n years is undefined because as n…

A: When talking about perpetuity, it is gheform of investms that is generally meant for infinite…

Q: A man borrowed P280,000 and agrees to pay the loan at the end of each month for 48 months at 1.5%…

A: Given Borrowed amount P=280,000 Interest rate =1.5% compounded monthly. Time (n) = 48 months

Q: posits 95,000 pesos every year end in an investment which pays a nominal annual rate of 7.65%…

A: Given Information

Q: If P1,000 becomes P6,343 after 13 years when invested, what is the nominal interest rate

A: Given Present value P=1000 Future value F= 6343 number of years =13 We have to calculate the…

Q: What is the definition of internal rate of return (IRR)? If you expect the annual interest rates are…

Q: Suppose that $5000 is deposited into an account that earns 3.5% interest compounded Semiannually.…

A: 5000 is deposited for 4 years and it is compounded semi-annually. We need to find value of 5000…

Q: The compound interest on a certain sum of money for 2 years is $ 52.00 and the simple interest for…

A: The rate of interest is charged by the lender on the principal amount for using its money.

Q: In calculating an effective semi-annual rate from an interest rate 1.5% per month, the value of r…

A: In calculating an effective semi-annual rate from an interest rate of 1.5 % per month, the value of…

Q: In order to go to college, Lucy borrowed money from Happy 3 years ago. She borrowed a sum of…

A: Amount borrowed P = 50,000 Interest rate R = 5% Time T = 8 years…

Q: The factor (P/F,i%,n) equals P=F/(1+i)^. O True O False

A: The future amount of money would be the total amount of money which would be accumulated at a rate…

Q: The sum of $1000 is deposited in a bank and left there to earn interest rate for 10 years. if the…

A: Amount deposited in bank (PV) = $1000 Interest rate earn on depsoted money (r ) = 10% Total time…

Q: Leon and Heidi decided to invest $2,500 annually for only the first eight years of their marriage.…

Q: Mr. Smith has saved $8,000 each year for 10 years. Two years after the saving period ended, Mr.…

A: Cashflow is defined as the amount of cash and cash equivalents that are being transferred in into…

Q: How much should Jane return at the end of 60 days if she loaned P10,000 from a friend at a simple…

A: Given Loaned amount =P10,000 rate of interest r=10% number of days =60

Q: The interest rate (i) is assumed to be a compound rate, unless specifically stated as simple…

A: Interest rate:- Interest rate refers to the proportion of principal amount, the amount borrowed,…

Q: In an effort to have enough money to finance his passion for top-level off-road racing, a mechanical…

Q: Mika buys a television set from a merchant who asks P1,250.00 at the end of 60 days (cash in 60…

A: Time value of money: It is significant because it permits financial backers to settle on a more…

Q: An amount of P dollars is borrowed for the given length of time at an annual simple interest rate of…

A: Annual due amount can be calculated as follows:

Q: Suppose that, to cover some of your college expenses, you are obtaining a personal loan form your…

A: The expense of getting can come in many structures. It is consistently to the greatest advantage of…

Q: Mr. Mallari borrowed P200, 000. The terms of the loan are 10% interest for 10 years with uniform…

A: Borrowed = 200,000 interest rate = 10% time Period = 10 year

Q: Find that how much must be invested at the end of every year at 11% so that $15,000 will be…

A: Given: Future Value (F.V.) = $15,000 Annual interest rate (r) = 11% = 0.11% Time in years = 5 years…

Q: Suppose that your rich uncle has $1,000,000 that he wishes to distribute to his heirs at the rate of…

A: Given: The present value amount is = $1,000,000 The annual distribution is = $100,000 The rate of…

Q: If an effective rate of interest is given 6%, compute for the interest rate if it pays thrice a…

A: Answer :- Given data Effective rate of interest 6% And Interest pays quartly.

Q: Determine the value of the following factors by interpolation, and compare the results with those…

A: (a) The capital recovery factor for 36 periods at 6.25 compounded interests can be found by using…

Q: Mrs Bruno borrowed money from a bank. She received from the bank P1,342 and promised to repay P1,500…

A: Simple interest has a following formula Interest = Principal amount * interest rate * time /100

Q: Trial and error is the only way to compute the internal rate of return (IRR) when interest is…

A: IRR stands for internal rate of return. It is the method that is used to measure the profitability…

Q: A firm borrows P2000 for 6 years at 8% per year interest rate. At the end of 6 years, it renews the…

A: A lump-sum singular amount installment is a sum paid at the same time, rather than a sum that is…

Q: Draw a cash flow diagram for $10,500 being loaned out at an interest rate of 12% year over a period…

A: Interest refers to the amount paid in excess of the principal amount by the borrower to the lender.…

Q: If the total interest paid equals the borrowed principal over 20 years, determine the discount rate…

A: Meaning of Financial Assets: The term financial assets refer to the situation, under which these…

Question

What is the compound amount factor (CAF) if I is the interest rate per year, m is a number
of periods per years, n is the number of periods and the interest rate is paid more than once
in a year?
a) | 1+
i
b) | 1+.
n
c) | 1+
n
d) | 1+

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

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 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, economics and related others by exploring similar questions and additional content below.

Similar questions

What is the definition of internal rate of return (IRR)? If you expect the annual interest rates are much different in the next 10 years, would the IRR be the ideal measure? Why or why not?
A discount interest loan is a loan arrangement where the interest and any other related charges are calculated at the time the loan is closed. Suppose a one-year loan is stated as $10,000 and the interest rate is 14%. Then, the borrower pays $1,400 interest up front, thereby receiving net funds of $8,600 and repaying $10,000 in a year. What is the effective interest rate on this one-year loan?
Determine the principal that would have to be invested to provide $200 of simple interest income at the end of two years if the annual interest rate is 9% ?
A college student borrowed $46,000 to pay for tuition, room, and board. Some of the money was borrowed at 4%, some at 6%, and some at 8%. How much (in dollars) was borrowed at each simple interest rate, given that the annual interest was $2,750 and the amount borrowed at 8% was three times the amount borrowed at 6%?
In an effort to have enough money to finance his passion for top-level off-road racing, a mechanical engineering graduate decided to sell some of his “toys." At time t = 0, he sold his chopper motorcycle for $18,000. Six months later, he sold his Baja pre-runner SUV for $26,000. At the end of year 1, he got $42,000 for his pro-light race truck. If he invested all of the money in a high-risk commodity hedge fund that earned 24% per year, compounded semiannually, how much did he have in the account at the end of 2 years?
In an effort to have enough money to finance his passion for top-level off-road racing, a mechanical engineering graduate decided to sell some of his “toys." At time t = 0, he sold his chopper motorcycle for $18,000. Six months later, he sold his Baja pre-runner SUV for $26,000. At the end of year 1, he got $42,000 for his pro-light race truck. If he invested all of the money in a high-risk commodity hedge fund that earned 24% per year, compounded semiannually, how much did he have in the account at the end of 2 years? Numeric Response
Mika buys a television set from a merchant who asks P1,250.00 at the end of 60 days (cash in 60 days). Mika wishes to pay immediately and the merchant offers to compute the cash price on the assumption that money is worth 8% simple interest. What is the cash price today?
The premier rate, the rate on corporate paper, the simple interest rate on a bank loan requiring interest to be repaid monthly, and the rate on an instalment loan based on add-on interest are each loan terms that should be defined and their relationships to one another should be discussed. Would each of these loans have the same effective yearly rate if the advertised rate on each of them was 5%? Explain.
What is the ordinary simple interest earned on P 35, 000 for the period from April 3, 2020 to October 14, 2020, if the interest rate is 18%?
Compounding refers to: Select one: a. the increased value of an investment that arises from the payment of periodic interest. b. the process of earning interest on both the interest and the principal of an investment. c. the paying back of both interest and principal during the life of a fixed-payment loan. d. the calculation of interest rates after the compounding effect of taxes has been allowed for.
In five years, a salary of $56,000 per year with a 5% growth due to cost-of-living adjustment in the fifth year would be $____. The same salary, with a 1% growth due to cost-of-living adjustment compounded yearly, would be $___ in five years.
What does the statement “interest rate 10%” signify? a The rate is effective per year. b The rate is nominal per year. c The rate is nominal per quarter. d The rate is effective per quarter.