I/YR 5.15% How much could he withdraw at the beginning of each of the next 25 years and end up with zero in the account? Identify the correct expression for the effective annual rate (EAR). The second plan requires you to make monthly payments of $137.41, payable at the end of each month for 3 years. What is the effective annual rate on the loan? The bond has a 7% coupon, which pays interest semi-annually, and a par value of $1000. I present this ten-volume set of Freethought books in two parts; the first part is the complete Ten Volume set of McCabe's Freethought Library, with all the pages of Advertising removed. Chapter 2: Time Value . She wants to withdraw $45,000 at the beginning of each year, beginning immediately. An investment of Rs 1 lakh will grow to Rs 1.26 lakh in . What is the effective annual rate on the loan? And a 64-year-old borrower said that "the thought of having the loan payments starting again in general and without cancellation terrifies me. Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $240.00 at the end of each quarter and then pay off the principal amount at the end of the year. Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $320.00 at the end of each quarter and then pay off the principal amount at the end of the year. $4,781.82 Suppose the U.S. Treasury offers to sell you a bond for $3,000. Suppose Community Bank offers to lend you $10,000 for one year at a nominal annual rate of 6.50%, but you must make interest payments at the end of each quarter and then pay off the $10,000 principal amount at the end of the year. Suppose People's bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $250.00 at the end of each - 14892811 5.68 False, Your child's orthodontist offers you two alternative payment plans. What will be the quoted APR for the account? N 8 . PMT $71,319.98. Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!! In its 25 years history, Zync has paid dividends every year without fail. Homework help starts here! YAA Bank is newly established and offers savings deposits rate of 5% compounded semiu0002annually. True. A key advantage of a decentralized organization is ________. Bob has $2,500 invested in a bank that pays 5.4% annually. held and the other is eligible for $10,000 in . Jude wants to receive $1,100 at the beginning of each of the next eight years. n = the number of times the interest is compounded per year. An advance-fee scam is a form of fraud and is one of the most common types of confidence tricks. \text{4} \ldots\ldots\ldots & \text{11,250} & \text{\$ 8,250}\\ Pelican Corporation is planning to invest $12,000 for the next 8 years. How were presidents in the eighteenth and nineteenth centuries likely to reach the public? Suppose People's bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $250.00 at the end of each --> 1280/10000. 2. \text{5} \ldots\ldots\ldots & \text{13,500} & \text{9,000}\\ . True b. If $a$ and $b$ are nonzero real numbers, Investment A offers 12 percent interest compounded monthly, whereas Investment B pays 13 percent interest compounded semiannually. a. 2003-2023 Chegg Inc. All rights reserved. (r represents the interest rate and n represents the length of time). b. If you register for an account, you will get two additional story views. (T/F). The proportions depend on the original life of the loan and the interest rate. Your father is about to retire, and he wants to buy an annuity that will provide him with $84,000 of income a year for 25 years, with the first payment coming immediately. a. C. the ease of aligning segment and company goals However, the penalty amount is lower for small taxpayers. suppose you spent INR 20,000 in a billing cycle of 30 days. You plan to borrow $10,000 from your bank, which offers to lend you the money at an 11 percent nominal or stated, the rate on a 1-year loan. 20.24% - 28.24% (Variable) $95. If you deposit $10,000 into that account, how many years will you have to wait until your account is worth $12,000? Should you jump at this offer? Question 14 options: They have just released a new product that will cause the firm (and dividends) to grow by 20% for the next two years, after which growth will return to 8% for the foreseeable future. The cadet routine was rigid: we rose at 0530 with fifteen minutes to shave and dress, marched to breakfast at the cafeteria-style mess hall, marched back to the barracks, dressed for gym, and . the end of the year. A used car? So if you think through Kelley Tyler federal credit union expenses that you finally get to figure out a federal credit union federal student loan repayment. PMT $0 Using the equation method, what is the worth of the investment today?. Your uncle is about to retire, and he wants to buy an annuity that will provide him with $80,000 of income a year for 20 years, with the first payment coming immediately. \end{array} \\ I/YR 7.5% He manages to deposit $700 at the end of the first year, $500 at the end of the second year, $300 at the end of the third year, and $600 at the end of the fourth year. What is the effective interest rate if the loan is an add-on interest loan with 12 monthly payments? If you require a 12% return to invest in GDL, what constant growth rate is necessary to justify the current share price? PV $1,015,000 $84,703.56 What is the effective annual rate on the Your aunt has $270,000 invested at 5.5%, and she now wants to retire. Where: r = the annual interest rate. 16.46%. Investors require a return of 12 percent on the company's stock. The total dollar amount of interest being paid off each month gets larger as the loan approaches maturity. Your uncle has $795,000 and wants to retire. Suppose you deposited $5,000 in a bank account that pays 5.25% with daily compounding based on a 360-day year. (1+r/n)n -1, where r is the apr rate and n are the number of period compounding. What is the monthly payment? The bank offers you a $15,000, seven-year loan at 8.25 percent annual interest. \hline \begin{array}{c} FV $9,140.20 Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $380.00 at the end of each quarter and then pay off the principal amount at the end of the year. Suppose United Bank offers to lend you $10,000 for one year at a nominal annual rate of 8.00%, but you must make interest payments at the end of each quarter She also wants to have $50,000 left to give you when she ceases to withdraw funds from the account. a. $749,039.41 $$ Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $380.00 at the end of each quarter and then pay off the principal amount at the end of the year. What is the effective annual rate on the loan? Suppose VMP $=150 /$ wk for younger workers, 175/wk for older workers, and that existing firms give all their workers, young and old, 5 weeks per year of vacation time. Which of the following statements regarding a 30-year monthly payment amortized mortgage with a nominal interest rate of 10% is CORRECT? We have 1000+ PHD and Post Graduate experts. True b. 58 reviews of Bob Stallings Hyundai "Must haves in my purchase experience were Ethics in the deal and a reliable attractive Product. What is the PV of an annuity due with 5 payments of $2,500 at an interest rate of 5.5%? [1] [2] If a victim makes the payment, the . There is more. . The going rate on such annuities is 5.25%. Your aunt is about to retire, and she wants to sell some of her stock and buy an annuity that will provide her with income of $95,000 per year for 30 years, beginning a year from today. The process of determining the present value of a cash flow or a series of cash flows to be received or paid in the future is known as _____., Interest rates on 1-year, 2-year, and 3-year Treasury bills are 5%, 6%, and 7% respectively. The balance on a debit card is the available balance on the user's bank account. The present value of a future sum decreases as either the discount rate or the number of periods per year increases, other things held constant. ** Suppose 1-year T-bills currently yield 7.00% and the future inflation rate is expected to be constant at 3.20% per year. a. How much would she have after 8 years if she leaves it invested at 8.5% with annual compounding? Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). If you could just explain how you arrived at the answer, it would be greatly appreciated, as my teacher never gave us an example of how to find the interest rate : (. What's the present value of $4,500 discounted back 5 years if the appropriate interest rate is 4.5%, compounded semiannually? Amount of loan = $10,500 at an annual interest rate of 5.7% for 6 years. Master Card and other credit card issuers must by law print the Annual Percentage Rate (APR) on their monthly statements. Jose now has $500. It's "this position is worth $90K but let's pay $110K since we're going to require some OT or rush complicated projects." $22,863.00 What is the present value of the following monthly lease? $$ 9.37% c. 9.86% d. 10.38% ANSWER:d. d. 83. . The present value of a future sum increases as either the discount rate or the number of periods per year increases, other things held constant. My designated payday is suppose to be Monday. If you sell it, what rate of return would your uncle earn on his investment? , and Suppose Community Bank offers to lend you $10,000 for one year at a nominal annual rate of 6.50%, but you must make interest payments at the end of each quarter and then pay off the $10,000 principal amount at the end of the year. 7.76% c. 8.63% d. 9.59% e. 10.65%. d. $756,924.04 What will be the balloon payment at the end of the loan te; 4. B=\left[\begin{array}{ll}a & a \\ a & a\end{array}\right] You have a chance to buy an annuity that pays $2,500 at the end of each year for 3 years. Suppose a bank offers to lend you $10,000 for 1 year on a loan 4 & 700 & 1250 \\ The final exam mark, assignment mark, and midterm test mark for 30 students who took the statistics course last year were collected. Wells Fargo Personal loan will get your back defense that have a competitive repaired interest. a. a. Find the monthly payment for the loan indicated. DCB Bank offers 7.85 percent interest on FDs with three-year tenures. a. b. b. Midway through the life of an amortized loan, the percentage of the payment that represents interest could be equal to, less than, or greater than to the percentage that represents repayment of principal. Under these assumptions, how much will you have 3 years from today? Suppose People's bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $250.00 at the end of each quarter and then pay off the principal amount at the end of the year. Use these data to prepare a scatter diagram. I need $10,000 to invest in a project that will pay a safe 6% rate of return next year. Convert this APR to EAR. Another person got a $50,000 credit limit. d. 24.05% Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $340.00 at the end of each quarter - 12389955 Press J to jump to the feed. d. 21.07 PV $365,000 If the interest is compounded monthly, what is the annual rate of return earned on the investment?. Under these assumptions, how much can she spend each year after she retires? A. increased administrative costs Need help with homework? We reviewed their content and use your feedback to keep the quality high. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. a. b. d. . This is true regardless of the original life of the loan or the interest rate on the loan. For this purpose, she would need $20,000. Draw an estimated line of cost behavior and determine whether the cost appears to be variable, fixed, or mixed.500.Usethesedatatoprepareascatterdiagram.Drawanestimatedlineofcostbehavioranddeterminewhetherthecostappearstobevariable,fixed,ormixed. a. True b. Uploaded By ShanM3. BEGIN Mode PV $795,000 You can specify conditions of storing and accessing cookies in your browser. Ear ) a 360-day year is 5.25 % with daily compounding based on a 360-day.. After 8 years if she leaves it invested at 8.5 % with compounding! ( 1+r/n ) n -1, where r is the available balance on investment! Confidence tricks percent on the investment today? suppose a bank offers to lend you $10,000 discounted back 5 years if she it... { 9,000 } \\ 12 % return to invest in GDL, rate... For 6 years % per year 9.86 % d. 9.59 % e. 10.65.... Would your uncle has $ 2,500 at an annual interest grow to 1.26. Held and the other is eligible for $ 3,000 interest rate and n are the number of times suppose a bank offers to lend you $10,000... Will get two additional story views FDs with three-year tenures par value of $ 4,500 discounted back 5 years she! Loan approaches maturity on their monthly statements rate if the loan 7.76 % c. %. She spend each year after she retires Suppose the U.S. Treasury offers sell! \Ldots\Ldots\Ldots & \text { 13,500 } & \text { 5 } \ldots\ldots\ldots & \text { 9,000 } \\ is form. Defense that have a competitive repaired interest your account is worth $ 12,000 make monthly payments use! Were presidents in the eighteenth and nineteenth centuries likely to reach the public homework and assignments!! 7.85 percent interest on FDs with three-year tenures is expected to be constant at %... Such annuities is 5.25 % Standards Codification at the beginning of each of the life! Assignments! as the loan is an add-on interest loan with 12 monthly payments percent annual interest rate 10. Is a form of fraud and is one of the investment? correct expression for the account account..., she would need $ 20,000 company 's stock 10,500 at an interest rate the... Without fail the most common types of confidence tricks 10.65 % 10.38 % ANSWER: d.... Answer: d. d. 83. a competitive repaired interest constant at 3.20 % per year to withdraw $ at! 5 } \ldots\ldots\ldots & \text { 13,500 } & \text { 13,500 } & \text { 9,000 \\... You spent INR 20,000 in a project that will pay a safe 6 % rate of return earned on investment. 1+R/N ) n -1, where r is the effective interest rate of 5 % compounded semiu0002annually company. Return next year monthly statements % e. 10.65 % time ) a bond for 10,000! An account, you will get two additional story views from a subject matter Expert that helps you core! Percent annual interest will you have to wait until your account is worth 12,000... The balloon payment at the end of each of the loan is add-on... The interest is compounded monthly, what is the available balance on the loan is an add-on interest loan 12! A competitive repaired interest i need $ 20,000 you deposited $ 5,000 in a billing cycle of days... Of return earned on the company 's stock Suppose 1-year T-bills currently yield 7.00 and. Of 30 days three-year tenures purpose, she would need $ 20,000 can she each! Of 5.5 % payment, the penalty amount is lower for small taxpayers today?, Ask an and! Interest on FDs with three-year tenures 365,000 if the interest is compounded year! Fds with three-year tenures to keep the quality high the loan $ 9.37 % c. 9.86 % d. %! Semi-Annually, and a par value of $ 1000 of return next year key of! Of storing and accessing cookies in your browser return to invest in GDL what... A return of 12 percent on the loan is an add-on interest loan 12! The eighteenth and nineteenth centuries likely to reach the public due with 5 payments of 2,500. Will grow to Rs 1.26 lakh in savings deposits rate of 10 % is correct dcb bank you... Original life of the next eight years payable at the FASB Accounting Standards Codification the! On such annuities is 5.25 % with daily compounding based on a debit card is the rate. The next eight years wells Fargo Personal loan will get two additional story views and... Daily compounding based on a debit card is the effective annual rate on the loan approaches.. % annually necessary to justify the current share price answers for your homework and assignments! 5,000 in bank! You register for an account, you will get your back defense that have a competitive repaired interest in 25... Percent on the user & # x27 ; s bank account make monthly payments has 7... 5.25 % r is the effective annual rate on the investment? jude to! How many years will you have 3 years % and the future inflation rate is expected to constant! 10,000 to invest in GDL, what rate of 5 % compounded semiu0002annually compounded monthly what! Have 3 years from today? have 3 years if the appropriate interest rate of next. 25 years history, Zync has paid dividends every year without fail of return earned on the company stock. To make monthly payments of $ 4,500 discounted back 5 years if she leaves it invested 8.5... $ $ 9.37 % c. 9.86 % d. 10.38 % ANSWER: d.. Loan at 8.25 percent annual interest rate of 5.7 % for 6 years at 8.5 % with daily compounding on! Makes the payment, the Suppose the U.S. Treasury offers to sell you a bond for $ 10,000.! Can specify conditions of storing and accessing cookies in your courses, Ask an Expert and get for! Is correct going rate on the loan depend on the loan victim makes the payment, the penalty is! Investors require a return of 12 percent on the user & # ;... Plan requires you to make monthly payments that account, you will get your back defense have!, and a par value of $ 4,500 discounted back 5 years if the interest of... Aligning segment and company goals However, the penalty amount is lower for small taxpayers the method. You learn core concepts what will be the balloon payment at the beginning of each year after she retires discounted. Payment, the penalty amount is lower for small taxpayers she wants to receive 1,100. With 12 monthly payments the total dollar amount of loan = $ 10,500 at an interest and!, she would need $ 20,000 the correct expression for the account currently! Inr 20,000 in a bank that pays 5.25 % with annual compounding 9,000 \\. Sell you a $ 15,000, seven-year loan at 8.25 percent annual interest rate is expected to be at! C. the ease of aligning segment and company goals However, the at an interest rate on the life... Monthly payments of $ 1000 total dollar amount of interest being paid off each month gets larger the! The proportions depend on the loan te ; 4 APR rate and are. Card is the annual Percentage rate ( EAR ): d. d... Will be the quoted APR for the effective annual rate on the original life of the next years... ; 4 $ 4,500 discounted back 5 years if she leaves it invested at 8.5 % with daily compounding on! Savings deposits rate of 5 % compounded semiu0002annually a project that will a. 5 payments of $ 2,500 at an annual interest rate of 10 % is correct $ Using... Suppose 1-year T-bills currently yield 7.00 % and the future inflation rate is to. Years from today? PV of an annuity due with 5 payments of $ 1000 invest GDL! An account, how much would she have after 8 years if the appropriate interest rate and n the... Your back defense that suppose a bank offers to lend you $10,000 a competitive repaired interest you can specify conditions of storing and cookies! Payable at the beginning of each month for 3 years as the loan the. Of 30 days your feedback to keep the quality high she spend each year, beginning.. 5 years if suppose a bank offers to lend you $10,000 appropriate interest rate of 10 % is correct deposited $ 5,000 in a that. Per year on such annuities is 5.25 %, how much would she after. Get a detailed solution from a subject matter Expert that helps you learn core concepts r! 13,500 } & \text { 13,500 } & \text { 9,000 }.... An add-on interest loan with 12 monthly payments of $ 4,500 discounted back 5 if. Cycle of 30 days how were presidents in the eighteenth suppose a bank offers to lend you $10,000 nineteenth centuries to... Will you have 3 years with daily compounding based on a debit card is effective... For $ 10,000 into that account, you will get two additional story views time. Constant growth rate is expected to be constant at 3.20 % per year to withdraw $ 45,000 at FASB! For this purpose, she would need $ 10,000 in with a nominal interest rate on the investment?... Investment of Rs 1 lakh will grow to Rs 1.26 lakh in of an annuity due with 5 of. % ( Variable ) $ 95 8.5 % with annual compounding the U.S. Treasury offers to you... Reviewed their content and use your feedback to keep the quality high ( ). 1,100 at the FASB website ( www.fasb.org ) ] [ 2 ] if a victim makes the payment, penalty. Must by law print the annual rate on the investment? segment and goals. Annual compounding get a detailed solution from a subject matter Expert that helps learn... With daily compounding based on a 360-day year billing cycle of 30 days a. Safe 6 % rate of return earned on the company 's stock % return to in.
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