Answered: What is the effective rate…

What is the effective rate corresponding to 18% compounded daily? Take 1 year is equal to 360 days. Select one: а. 19.44 % b. 19.61 % С. 19.31 % d. 19.72 %

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 9PROB

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Concept explainers

Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.

Question

Q30

What is the effective rate corresponding to 18% compounded daily? Take 1 year is equal to 360
days.
Select one:
a. 19.44 %
b. 19.61 %
c. 19.31 %
d. 19.72 %

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