The total amount (marginal accrual) can be saved by the CR Company by skipping one week payment to the employees Introduction: The effective annual rate (EAR) is the actual rate that is earned by an individual. This interest rates are generally shown as it were compounded once in a year. Solution: The company can earn an amount of $1,875 from interest by holding the payment of employees for an extra week.

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Chapter 16, Problem 16.2WUE

Summary Introduction

To discuss: The total amount (marginal accrual) can be saved by the CR Company by skipping one week payment to the employees

Introduction:

The effective annual rate (EAR) is the actual rate that is earned by an individual. This interest rates are generally shown as it were compounded once in a year.

Solution:

The company can earn an amount of $1,875 from interest by holding the payment of employees for an extra week.

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