f the interest that 6000 TL will bring in 3 months over 21% interest rate is brought by the same amount of money deposited in another bank for 7 months, what is the interest rate applied by the second bank? A) 5 B) 8 C) 10 D) 3 E) 9

f the interest that 6000 TL will bring in 3 months over 21% interest rate is brought by the same amount of money deposited in another bank for 7 months, what is the interest rate applied by the second bank? A) 5 B) 8 C) 10 D) 3 E) 9

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 2STP

See similar textbooks

Related questions

Q: A bank quotes an interest rate of 5% per year with quarterly compounding. What is the equivalent…

A: The effective interest rate is the true cost of borrowing, taking into account the compounding of…

Q: PROBLEMS 1. What is the annual rate of interest if P265 is earned in four months on an investment of…

A: Time Value of Money The time value of money, which argues that money received today is worth more…

Q: What is the nominal rate of interest at which money will be 5 times itself in 20 years and six…

A: Nominal interest refers to the stated or advertised interest rate on a financial instrument, such as…

Q: 9 A deposit of $720 earns interest rates of 8 percent in the first year and 11 percent in the…

A: Deposit amount (P) = $720 Interest rate in year 1 (r1) = 8% Interest rate in year 2 (r2) = 11%

Q: Pro 70 tamoms or to insong 3) What is the annual interest rate earned on a deposit that grew from…

A: Number of years (n) = 5Future Value after 5 years = $502.84Present Value = $250We need to calculate…

Q: 3. Find the amount (in $) of interest and the maturity value of the loans. Use the formula MV = P…

A: Solution:- When an amount is invested somewhere, it earns interest and the amount receivable at…

Q: Bank A offers a 1-year Forward Rate Agreement at 7% p.a. which will settle against the 3-month…

A: A financial contract known as a forward rate agreement (FRA) is made between two parties in order to…

Q: A bank pays 5% with daily compounding on its savings accounts. Should it advertisethe nominal or…

A: An interest rate is usually in two forms namely nominal interest rate and effective interest rate.…

Q: 5. A bank claims in an advertisement that its certificates of deposit offe a nominal rate of 7.0%…

A: The effective interest rate is the interest rate considering the impact of the compounding effect on…

Q: TEST I. PROMLEM SOLVING: A bank offers 0.25% annual simple interest rate for a particular deposit.…

A: Simple Interest is the method in which we calculate the interest on a specific principal amount at a…

Q: What is the effective interest rate of a simple discount note for $27,100, at an ordinary bank…

A: Effective interest rate is the rate charged on the borrowed amount on an annual basis considering…

Q: Savings institutions often state a nominal rate, which can be thought of as a simple annual interest…

A: Nominal yield = 7% (Compounding daily)Number of days in a year = 365 days

Q: A bank charges interest rate of 5.50% on loans. The interest rate compounds monthly. What is the…

A: Annual interest rate (r) = 5.50% or 0.055Number of times compounding takes place in a year (n) = 12…

Q: You deposit $ 75,895 in your account today. You make another deposit at t = 1 of $ 54,744. How much…

A: The concept of time value of money will be used here. As per the concept of time value of money the…

Q: A bank offers an account with an APR of 5.8% and an EAR of 5.88%. How does the bank compound…

A: APR is the annual percentage rate. It refers to the quoted rate or the nominal rate. EAR is the…

Question

If the interest that 6000 TL will bring in 3 months over 21% interest rate is brought by the same amount of money deposited in another bank for 7 months, what is the interest rate applied by the second bank?
A) 5

B) 8

C) 10

D) 3

E) 9

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Computation of principle amount

VIEW

Step 3 Computation of Interest rate applied by the second bank

VIEW

Step 4 Answer

VIEW

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

The rates offered by a bank on deposits between $10,000 and $24,999 are shown in the following table: Term 180 to 269 days 270 to 364 days Rate. 3.15% 3.45% How much more will an investor earn from a $10,000 investment in a 364-day GIC than from two consecutive 182-day GICS? Assume that the interest rate on 180- to 269-day GICS will be the same on the renewal date as it is today. Remember that both the principal and the interest from the first 182-day GIC can be invested in the second 182-day GIC. (Use 365 days a year. Do not round the intermediate calculations. Round your final answer to 2 decimal places.) An investor will earn $ more
am. 44.
a and b
3. You have a bank deposit now worth $5000. How long will it take for your deposit to be worth more than $8000 if: (a) The account pays 5 percent actual (per sub-period) interest every half-year and is compounded every half- year? (b) The account pays 5 percent nominal interest, , compounded semiannually?
K What is the effective interest rate of a simple discount note for $27,100, at an ordinary bank discount rate of 16%, for 10 days? Assume that there are 360 days in a year. The effective interest rate is %. (Round to the nearest tenth as needed.) In m ac cogr (Co tate
What is the effective interest rate of a simple discount note for $31,200, at an ordinary bank discount rate of 14%, for 30 days? Assume that there are 360 days in a year. The effective interest rate is %. (Round to the nearest tenth as needed.) E 4
4.
Assume 2% interest rate. If $50 is put in the bank on May 1, 1988, how much will be in the bank on May 1, 2021? Assume 2% interest rate. If $50 is put in the bank on June 1, 1996, how much will be in the bank on June 1, 2021?
1
Q7. What is the effective interest rate on a loan which charges 3.75% p.a. interest compounded monthly?
3. Find the amount (in $) of interest and the maturity value of the loans. Use the formula MV = P + I to find the maturity value. (Round your answers to two decimal places.) Principal Rate (%) Time Interest Maturity Value $185,000 14 1 2 5 months $ $
Q5