Homework Answers
Ans. 2. A. interest that is computed only on the original sum
simple interest is the interest that is computed only on the original sum of the principal amount. there is no previous interest amount added in principle amount like calculated compound interest.
Ans. 3. D. Any interest rate more than 5%
Two cash flows that are equivalent at 5% interest also equivalent at any interest rate more than 5%.
Equivalence depends on the interest rate, an alternative that is acceptable to one decision maker may be unacceptable to another who invest at a higher rate.
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Question 2 1 pts Simple interest is O interest that is computed only on the original...
Question 16 The calculation of simple interest for a $100,000 investment at 6% for 5 years...
Question 16 The calculation of simple interest for a $100,000 investment at 6% for 5 years would be A) Less than compound interest B) More than compound interest C) The same under both simple and compound interest since the amount is under $125,000 D) The same under both simple and compound interest since the amount is under $155,000
Which of the following statements is TRUE. Multiple Choice Compound interest pays Interest on not only...
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1. Compound interest method refers to: Interest is calculated only on the original principle b. Interest...
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80 Quantitative Reasoning,hClass Activites Lesson 8c 2% simple interest annually when computing simple interest 2% of...
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Question 2 1 pts A tax on interest income: causes the gross interest rate paid by...
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2 pts D Question 1 What is the most important aspect of a telescope O resolution...
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Drop down options: 1. Garret, Mike 2. add-on, simple interest Ch 07: Assignment - Using Consumer...
Drop down options:
1. Garret, Mike
2. add-on, simple interest
Ch 07: Assignment - Using Consumer Loans 10. Comparing payments on installment loans when using the simple interestor add-on methods to compute finance charges Comparing Loan Payments Using the simple interest and Add-on Methods of Interest Computation Installment loans allow borrowers to repay the loan with periodic payments over time. They are more common than single-payment loans because it is easier for most people to pay a fixed amount periodically...
Question 5 2 pts Consider a 26-year, fixed-rate mortgage with an original balance of $765,000 and...
Question 5 2 pts Consider a 26-year, fixed-rate mortgage with an original balance of $765,000 and an interest rate of 3.44%. What is the monthly payment on this mortgage? Round your answer to 2 decimal places (nearest cent).
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Which of the following statements is TRUE. Multiple Choice Compound interest pays Interest on not only the original amount invested but also on any interest payments previously earned. Compound Interest applies to consumer loans but not to investments Compound interest automatically takes into account the impact inflation will have on the value of an investment O Compound Interest normalizes the expected rate of returns taking into account the level of risk involved. Specialization is typically not complete because Multiple Choice...
1. Compound interest method refers to: Interest is calculated only on the original principle b. Interest is calculated on a dollar received today the original principle and on all interest accumulated since the Interest is calculated on both the original principle and on all interes beginning of interest period. d. All of the Above 2. Discounting is: a. Converting present value into its future value b. Value today of a payment to be received c. Calculating the future value using...
80 Quantitative Reasoning,hClass Activites Lesson 8c 2% simple interest annually when computing simple interest 2% of the nitial balance of $1,000 s added to the account every year. The amount of interest eamed is the same each year 2) Suppose you invest $1,000 in a savings account that pays Part A Complete the following table of the interest and total balance in the account based on the simple interest assumption. Total Balance (B) (initial investment+ total interest) Number of Years...
Question 30 2 pts The demand for goods, given the real interest rate o increases less than one-for-one with an increase in government spending. O does not increase when government spending increases, due to crowding out. o increases one-for-one with an increase in government spending. o increases more than one-for-one with an increase in current government spending.
Question 2 1 pts A tax on interest income: causes the gross interest rate paid by investors to exceed the net interest rate received by savers. O will always reduce saving. will always increase saving. is equivalent to a lump-sum tax Question 3 1 pts A tax on interest income does not prevent credit market from efficiently allocating resources. True False Question 4 1 pts Currently, the tax treatment of capital gains in the United States is such that: all...
2 pts D Question 1 What is the most important aspect of a telescope O resolution collecting area O magnification weight D Question 2 2 pts If you travel close to the speed of light and 1 year passes by for planet earth how many years passes by for you? less than 1 but more than o O more than 1 O exactly 1 less than 0 (negative) Question 3 2 pts If you are close to a black hole...
Drop down options:
1. Garret, Mike
2. add-on, simple interest
Ch 07: Assignment - Using Consumer Loans 10. Comparing payments on installment loans when using the simple interestor add-on methods to compute finance charges Comparing Loan Payments Using the simple interest and Add-on Methods of Interest Computation Installment loans allow borrowers to repay the loan with periodic payments over time. They are more common than single-payment loans because it is easier for most people to pay a fixed amount periodically...
Question 5 2 pts Consider a 26-year, fixed-rate mortgage with an original balance of $765,000 and an interest rate of 3.44%. What is the monthly payment on this mortgage? Round your answer to 2 decimal places (nearest cent).
Calculator Mastery Problem: Time Value of Money Time value of money Due to both interest earnings and the fact that money put to good use should generate additional funds above and beyond the original investment, money tomorrow will be worth less than money today. Simple interest Bolden Co., a company that you regularly do business with, gives you a $19,000 note. The note is due in three years and pays simple interest of 9% annually. How much will Bolden pay...
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