Answered: 3. Find the annual percentage rate…

3. Find the annual percentage rate (APR), a.k.a. annual equivalent rate (AER), of interest of a savings account that has a nominal rate of 6.6%, compounded monthly.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

If a bank compounds savings accounts monthly, the effective annual rate is greater than the nominal rate Group of answer choices True False
Calculate the finance charge (in $) and the annual percentage rate for the installment loan by using the APR formula. (Round dollar amounts to the nearest cent and percentages to one decimal place.) Monthly Payment Number of Finance Amount Financed APR Payments Charge $18,100 72 $426.08 $ 12577.76 %
5. Which of the following bank accounts has the highest effective annual return (EAR)? a. An account that pays 8% nominal interest with monthly compounding. b. An account that pays 8% nominal interest with annual compounding. c. An account that pays 7% nominal interest with daily (365-day) compounding. d. An account that pays 7% nominal interest with monthly compounding. 6. Which of the following statements regarding a 30-year monthly payment amortized mortgage with a fixed nominal interest rate of 10% is CORRECT? a. The monthly payments will increase over time. b. A larger proportion of the first monthly payment will be interest, and a smaller proportion will be principal, than for the last monthly payment. c. The total dollar amount of interest being paid off each month gets larger as the loan approaches maturity. d. The amount representing interest in the first payment would be higher if the nominal interest rate were 7% rather than 10%. 7. What is the present value of the following…
1. Calculate the effective annual rate for a certificate of deposit that pays 4.1% APRcompounded monthly.
Calculate the finance charge (in $) and the annual percentage rate for the installment loan by using the APR formula. (Round dollar amounts to the nearest cent and percentages to one decimal place.) Amount Financed 18,200 Number of Payments = 72 Monthly Payment = 424.08 Solve for Finance Charge and APR
which of the following banks would you choose for a savings account based on the following rates offered? 1. 6% APR compounded annually 2. 5% APR compounded annually 3. 5% APR compounded semi-annually 4. 4% APR compounded weekly 5. 6% APR compounded quarterly.
4. A bank CD that pays 7.38 percent compounded semiannually. (Round answer to 2 decimal places, e.g. 15.25%.) what is the Effective annual rate %?
am. 44.
Find the APR (true annual interest rate), to the nearest half percent, for the following loan. Amount Financed Finance Charge Number of Monthly Payments $1700 $96 18 LOADING... Click the icon to view the annual percentage rate table. Question content area bottom Part 1 The annual percentage rate is enter your response here%.
Express the term Effective interest rate per payment period, quarterly payments with weekly compounding?
The formula for computing interest on a note is: Principal of the notex Annual interest rate x Time expressed in fraction of year. True or False True False
Assume that at time 0 a sum L is lent for a series of n yearly payments. The rth payment, of amount xr, is due at the end of the rth year. Let the effective annual interest rate for the rth year be ir. Give an identity which expresses L in terms of the xr and ir.

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