Assuming that the investor is subject to 11% income tax and is looking to obtain a net redemption yield of 6.9% per annum, calculate, to 2 decimal places, the price paid by the investor.

Q: Find the effective rate of  interest if the nominal rate is 12 % compounded bi - monhtly.

A: Annual Nominal interest rate = 0.12 Number of compounding in a year (n) = 6 (i.e. 12 months / 2)  Bi…

Q: Given a 7 percent interest rate, compute the present value of payments made in years 1, 2, 3, and 4…

A: Given information: Interest rate is 7% Present values of payments are $1,000, $1,300, $1,300 and…

Q: The market’s 1 year interest rate is 6% while the 2-year interest rate is 7%. b) If a company needs…

A: IR1​ is the 1-year interest rate, which is 6%, IR2​ is the 2-year interest rate, which is 7%, and n…

Q: An investor purchases a 90-day bank bill with a face value of $1 million at 4.88%. Calculate the…

A: In a purchase and sale transaction of a bank bill, the yields at the time of purchase and sale…

Q: What would be the annual percentage yield for a savings account that earned $60.00 in interest on…

A: Annual Precentage Yield = (Annual interest / Principal amount ) x 100Note : 365 days = 1 year

Q: How long will a principal earn an interest equal to half of it at 5% simple interest?

A: Simple Interest means that interest is earned on the investment at the same rate for the duration of…

Q: If the annual interest rate is 9% and inflation rate is 5%. What does the tax rate have to be in…

A: Real rate of return=1+annual interest rate1+Inflation rate-1=1.091.05-1=3.8%

Q: If there is a deflation rate of 2% and your account is earning a nominal interest rate of 1.75%,…

A: Deflation rate (d) = 2% Nominal interest rate (r) = 1.75%

Q: A business person invests $3,108 at 3% compounded semiannually for two years. What is the future…

A: Future value of an investment is the value of present amount in future

Q: Which of the following is the cheapest for a borrower? 7% annual money market basis 7% semi-annual…

A: Generally, the annual basis is cheaper as compared to the semiannual basis, because on an annual…

Q: Compute the pretax profit (income before income taxes) if the net income is $140,000 and the income…

A: Net income = $140,000 Income tax rate = 0.30 or 30% Pretax profit = ?   Pretax profit is the profit…

Q: You invest 185 000 TL to a bank deposit account at gross rate of %24.5 for 65 days. If the…

A:

Q: For the following investments, compute the amount of compound interest earned in and the annual…

A: CASE 1Principal (P) = $5,000Nominal rate (r) = 10% or 0.1Compounding frequency (n) = 2…

Q: At an annual effective rate of interest i = 4%, find the PV of a perpetuity- immediate with annual…

A: Data given: Annual effective rate of interest i= 4% First stream = constant perpetuity of 3 Second…

Q: Find the equivalent future worth of the following payments. Use 6% interest rate compounded…

A: Interest Rate = 6% Compounded Annually Month Month (in Years) = Month / 12 Cash Flow 0 0.00…

Q: Two accounts each begin with a deposit of $7000. Both accounts have rates of 6.5%, but one account…

A: Principal Investment "P" is $7000 Interest rate is 6.5% To Find: Account Balance after 1,5,10 and…

Q: (a) Given the effective rate of interest as 7.5%, calculate the present value which will provide…

A: Present value is the future value discounted using the interest rate and time period. Present value…

Q: Based on the following data, calculate the items requested: Rental Costs Buying Costs Annual rent…

A: Comparing recurring expenses is necessary when deciding between purchasing and renting. The yearly…

Q: If i= 14.8% per year, compounded monthly, What is the effective interest rate per semiannual? (ABET…

A: Lets understand the basics For calculating semi annual interest rate from monthly compounded…

Q: Calculate the percentage return on a​ 1-year Treasury bill with a face value of ​$10,000if you pay…

A: The treasury bill is issued at discount but matures at the face value. There is no interest on the…

Q: A business person invests $4,962 at 4% compounded semiannually for two years. What is the future…

A: Present Value (PV) = $4,962 Rate of interest = 4% per annum = 2% for 6 months Time period = 2 years…

Q: What is the discounted value (present value), and compound discount (interest) of a debt of…

A: Future value is a value received in a future period after adding interest as per the particular…

Q: Calculate the nominal interest p.a. compounded daily that is equivalent to 3.7% p.a. compounded…

A: The equivalent annual interest rate is calculated by

Q: If the rate of inflation is 6.5%, what nominal interest rate is necessary for you to earn 3.3% real…

A: Given information: Rate of inflation is 6.5% Real interest rate on investment is 3.3%

Q: A passbook savings account has a rate of 8%. Find the effective annual yield, rounded to the nearest…

A: Y = (1+(r/n))n - 1 Where Y = Effective Annual Yield (TO be calculated) r = Annual rate of interest…

Q: You deposit $10,000 in an account that pays 4.5% interest compounded quarterly. Use the future value…

A: Interest rate (r) = 4.5% compounded quarterly Hence, compounding frequency (k) = 4

Q: Suppose that you invest $1,000 today at an annual rate of 11%. Assuming that the expected annual…

A: the concept we're discussing here is the effect of inflation on purchasing power and how it relates…

Q: What is the fixed charge coverage ratio? Answer in the form of 3.2x (one decimal place) Assume: 1.…

A: The fixed-charge coverage ratio demonstrates how effectively a business can use its earnings to…

Q: 1. Using simple interest computations, find the future value of $3,620 at 2 38%/2 38%

A: Hi, since there are multiple questions posted, we will answer the first question. If you want any…

Q: Calculate the present value (principal) and the compound interest (in $). Use Table 11-2. Round your…

A: Compound interest can be calculated by using this equation A=P*(1+i)n Where A=Compound amount/future…

Q: A product is to be paid perpetually for P 10,551 at the rate of 1%. How much is the present worth of…

A: Present value of perpetuity is the value of never ending cash flows today. Although the cash flow is…

Q: Comparing Taxable and Tax-Free Yields.  With a 28 percent marginal tax rate, would a tax-free yield…

A: We need to compare the after tax yield of taxable instrument with the yield of tax free instrument.…

Q: A leasehold office property is let for 9 years with a profit rent of RM300,000 per annum (gross) for…

A: A leasehold property is one that is leased to the buyer of the property for a predetermined amount…

Q: An investor purchases a 90-day bank bill with a face value of$1million at4.88%       .…

A: The yields on a bank bill are different at the time of purchase and sale. This will lead to a…

Q: what is the annual percentage yield for an account that earns 6.1 % intreast compounded continously

A: annual percentage yield (APY) is the return earned on  a deposit taking into consideration the…

Q: Calculating Real Rates of Return IfTreasury bills are currently paying 4.7 percent and the inflation…

A: Real rate of return refers to the return after the adjustment of the inflation rate.

Q: For a present sum of $620,000, determine the annual worth (in then-current dollars) in years 1…

A: Present sum = 620000 i = 12% inflation rate = 5% n=7 years PW = 620000(A/P,12%,7) =620000(0.2191177)…

Q: 1) what is the discount yield on a 9-month T-bill sold for RM925, assuming there are 365 days in a…

A: T bill are sold at discount to face value the discount rate is YEILD on T bills.

Interest Rate

When you deposit your money with the bank, the deposit earns you some extra money at the end of the specific period – something more than what you deposited. That amount of money that the bank pays you for keeping the money with the bank is the “interest” and the percentage at which the bank pays you for your amount is called the “interest rate”.