The table below shows the rate of return, expressed as an APR, for four investment opportunities. The LOWEST effective a...
The table below shows the rate of return, expressed as an APR, for four investment opportunities. The LOWEST effective annual rate of return you could earn on any of these investments is closest to _____________. Investment Rate of Return (APR) Compounding
A 6.3830% Annual
B 6.2116% Daily
C 6.2834% Quarterly
D 6.2744% Monthly
answers choices are
a.
6.4580%
b.
6.4080%
c.
6.3830%
d.
6.4330%
Homework Answers
The LOWEST effective annual rate of return you could earn on any of these investments is closest to:-
a) 6.3830%
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The table below shows the rate of return, expressed as an APR, for four investment opportunities. The LOWEST effective a...
Question 4 Which of the following bank accounts has the LOWEST effective annual return? An account...
Question 4 Which of the following bank accounts has the LOWEST effective annual return? An account that pays 12% nominal interest with monthly compounding. An account that pays 13% nominal interest with quarterly compounding. An account that pays 13% nominal interest with semiannual compounding. An account that pays 12% nominal interest with daily compounding
8. An investor has the choice to compound an investment with a stated 5% annual return...
8. An investor has the choice to compound an investment with a stated 5% annual return either: annually, quarterly, or continuously. The effective annual rate (EAR) is highest with _ compounding and lowest with compounding. A. annual ; quarterly B. quarterly ; annual C. continuous ; annual D. annual ; continuous
Periodic interest rates. In the following table, , fill in the periodic rates and the effective...
Periodic interest rates. In the following table, , fill in the periodic rates and the effective annual rates. First, fill in the periodic rates in the following table. (Round to two decimal places.) Compounding per Year Effective APR Period Periodic Rate Annual Rate Semiannual 7% 2 Data Table (Click on the following icon 9 in order to copy its contents into a spreadsheet.) Compounding per Year Effective Period APR Periodic Rate Annual Rate Semiannual 7% 2 Quarterly Monthly Daily 8%...
Your best friend consults you for investment advice. You learn that his tax rate is 38%, and he has the following current investments and debts: • A car loan with an outstanding balance of $5,000 and a 4.79 APR (monthly compounding) • Credit cards with
Your best friend consults you for investment advice. You learn that his tax rate is 38%, and he has the following current investments and debts:• A car loan with an outstanding balance of $5,000 and a 4.79 APR (monthly compounding)• Credit cards with an outstanding balance of $10,000 and a 14.94%APR (monthly compounding)• A regular savings account with a $30,000 balance, paying a 5.44% effective annual rate (EAR)• A money market savings account with a $100,000 balance, paying a 5.25% APR (daily compounding)• A tax-deductible home...
The effective annual rate (EAR) for a loan with a stated APR of 6% compounded quarterly...
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19. Which of these has the highest effective annual rate (EAR)? (In case you forgot, e...
19. Which of these has the highest effective annual rate (EAR)? (In case you forgot, e = 2.71828) A. 10.2% quoted rate, annual compounding B. 10.0% quoted rate, monthly compounding C. 9.8% quoted rate, daily compounding D. 10.1% quoted rate, quarterly compounding
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Problem 2.2 Effective interest rate Given: The nominal interest rate is 7%. You wish to know...
Problem 2.2 Effective interest rate Given: The nominal interest rate is 7%. You wish to know the difference in the frequency of compounding Find: The effective (annual) interest rate if the nominal interest rate of 7% is compounded (a) quarterly, (b) monthly, (c) weekly, (d) daily, and (e) continuously. Solution:
Problem 2.2 Effective interest rate Given: The nominal interest rate is 7%. You wish to know...
Problem 2.2 Effective interest rate Given: The nominal interest rate is 7%. You wish to know the difference in the frequency of compounding Find: The effective (annual) interest rate if the nominal interest rate of 7% is compounded (a) quarterly, (b) monthly, (c) weekly, (d) daily, and (e) continuously. Solution
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a. For an interest rate of 100% per year compounded continuously, calculate the effective daily, weekly, monthly, quarterly, semiannually, and annually interest rates. b. An investor requires an effective return of at least 12% per year. What is the minimum annual nominal rate that is acceptable for continuous compounding?
Question 4 Which of the following bank accounts has the LOWEST effective annual return? An account that pays 12% nominal interest with monthly compounding. An account that pays 13% nominal interest with quarterly compounding. An account that pays 13% nominal interest with semiannual compounding. An account that pays 12% nominal interest with daily compounding
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Periodic interest rates. In the following table, , fill in the periodic rates and the effective annual rates. First, fill in the periodic rates in the following table. (Round to two decimal places.) Compounding per Year Effective APR Period Periodic Rate Annual Rate Semiannual 7% 2 Data Table (Click on the following icon 9 in order to copy its contents into a spreadsheet.) Compounding per Year Effective Period APR Periodic Rate Annual Rate Semiannual 7% 2 Quarterly Monthly Daily 8%...
Problem 2.2 Effective interest rate Given: The nominal interest rate is 7%. You wish to know the difference in the frequency of compounding Find: The effective (annual) interest rate if the nominal interest rate of 7% is compounded (a) quarterly, (b) monthly, (c) weekly, (d) daily, and (e) continuously. Solution:
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