In one instance, a financial institution loaned you $20,000 for two years at an apr of 4.75% for which you must make monthly payments. In a second instance, you loaned a financial institution $20,000 for two years at an apr of 4.75% compounded monthly. What is the difference in the amount of interest paid? Round your answer to the nearest cent
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
In one instance, a financial institution loaned you $20,000 for two years at an apr of 4.75% for which you must make monthly payments. In a second instance, you loaned a financial institution $20,000 for two years at an apr of 4.75% compounded monthly. What is the difference in the amount of interest paid? Round your answer to the nearest cent
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