What is the effective annual rate (EAR) if your credit card charges you 10.45 percent compounded quarterly? Show your formula/calculation/explanation! Why is it different from annual percentage rate?
Q: Suppose your credit card issuer states that it charges a 24.00% nominal annual rate, but you must…
A: Effective Annual Rate(EAR) = [(1+ nominal rate/n)^n]-1 where, n = compounding period
Q: Calculating the effective annual rate) You've just received an offer from a bank for a credit card…
A: It can be calculated using following formula Effective annual interest rate = (1 + (nominal rate /…
Q: se that $2500 is placed in a savings account at an annual rate of 3.4, compounded quarterly.…
A: The period can be calculated by using the EXCEL NPER function. Where, 'RATE' is the interest rate…
Q: A bank offers 0.5% effective monthly interest. What is the effective annual rate with monthly…
A: Effective annual interest rate(EAR) refers to the actual interest rate which is received on deposits…
Q: What nominal annual discount rate compounded semiannually is equivalent to a nominal rate of…
A: Nominal Interest Rate: When the market inflation is not taken into consideration while computing the…
Q: Explain the meaning of a 20% annual percentage rate (APR) quotedby the credit c.ird company? And how…
A: Answer: Annual percentage rate (APR) applies to the interest rate charged annually to borrowers and…
Q: A loan is offered with monthly payments and a 8.50 percent APR. What's the loan's effective annual…
A: Effective annual rate is the rate that is actually earned. It can be calculated Effective annual…
Q: Give your answers rounded to 6 decimal places in the following questions. Given that the effective…
A: As you have asked multiple questions we will solve the first question as per policy. Please ask…
Q: You are told the effective interest rate on an account is 2.1%, if the interest is compounded…
A: Formulas:
Q: If your credit card calculates interest based on 16.75% APR, compounded quarterly: (a) What are your…
A: The yearly rate that incorporates the magnifying effect of many compounding periods each year of…
Q: )If your credit card calculates interest based on 17.35% APR, compounded quarterly : a) What are…
A: The effective annual rate is the actual rate of interest a loan will charge in a year after taking…
Q: How much money should be on the account today in order for annually withdrawals of $100.00 to be…
A: Here we will use the concept of time value of money. As per the concept of time value of money the…
Q: A department store charges 1.5% interest per month, compounded continuously, on its customers’…
A: The real interest that an investor earns on the investment and a borrower pays on loan after…
Q: If the stated annual rate of interest compounded semi-annually is 12.5% then what is the equivalent…
A: Interest rate (APR) = 12.5% Number of compounding per year (m) = 2
Q: Find the APR (true annual interest rate), to the nearest half percent, for the following loan.…
A: APR FORMULA: APR =interestprincipaln×365×100 where, n = no of term of loan in days
Q: If your credit card’s APR is 24% compounded daily, what isthe effective annual interest rate that…
A: Given information: APR is 24% compounded daily
Q: What is the effective annual rate (EAR) for an annual percentage rate (APR) or a nominal annual rate…
A: EAR = [(1+Nominal interest rate/n)^n]-1 where, n = compounding period In case of semi-annual…
Q: An account pays interest at a nominal rate of 3% per year. (a) Find the effective annual yield if…
A: Effective yield refers to return on bond that has its interest payments and is calculated by…
Q: 3a. You are paying an effective annual rate of 18.974 percent on your credit card. The interest is…
A: Solution:- Effective annual rate means the net interest rate for an year, after effect of all the…
Q: est is paid at a rate of 5% per year, compounded quarterly, what is the effective annual rate?
A: The given problem can be solved using EFFECT function in excel. EFFECT function computes effective…
Q: Chuong Ngo borrows $3200 from a bank that advertises a 8% simple interest rate and repays the loan…
A: Given: Borrowed amount = $3,200 Simple interest = 8% Monthly payments =4
Q: Money borrowed today is to be paid in 8 equal payments at the end of each quarter. If the interest…
A: Quarterly payment (Q) = P 37291 n = 8 payments r = 1% per annum = 0.25% quarterly
Q: Calculate the finance charge (in $), the finance charge per $100 (in $), and the annual percentage…
A: AMOUNT FINANCED = $17.910 NO OF PAYMENT = 48 MONTHLY PAYMENT = $550.47 TOTAL PAYMENT = $550.47 x 48…
Q: Find the annual simple interest rate of a loan, where $900 is borrowed and where $1008 is repaid at…
A: Simple interest is the type of interest that is calculated on the original amount of the loan and…
Q: You are paying an effective annual rate of 15.33 percent on your credit card. The interest is…
A: Calculation of annual Percentage of rate is shown below:
Q: Savings institutions often state a nominal rate, which can be thought of as a simple annual interest…
A: Effective rate refers to actual return that an investment will generate in a period after…
Q: What is the nominal rate of interest compounded semi annually which is equal to 8.65% compounded…
A: The effective annual rate of interest is the actual or the real rate of interest paid or received…
Q: Calculate the finance charge (in $), the finance charge per $100 (in $), and the annual percentage…
A: Finance charge is an extra payment paid on borrowed amount for the period. It is the expense and…
Q: Savings institutions often state a nominal rate, which can be thought of as a simple annual interest…
A: The effective annual interest rate refers to the rate that is actually earned on an investment or…
Q: A bank quoted 10% annual interest rate. If the bank compounds the interest rate quarterly, what…
A: Quarterly rate = Annual rate / Number of quarters in a year Quarterly rate =10% /4 Quarterly rate…
Q: An account pays 7% annual interest compounded monthly. What is the effective interest rate on this…
A: A 7% annual interest compounded monthly implies that a monthly interest of 7%/12 is being compounded…
Q: If you deposit $700 in a bank account that earns 5 percent per year, how much total interest will…
A: Interest Amount = Principal * ( 1 + r )n - Principal
Q: you recieve a credit card offer that charges interest at 1.75% per month compounded monthly. What is…
A: The nominal rate of interest is the rate that is free from the compounding effect. it is also known…
Q: What is the annual percentage rate on a loan with a stated rate of 2 percent per quarter? A. 2.00…
A: In the given question we require to calculate the annual percentage rate on a loan if the stated…
Q: Which is better for the depositor: an account that yields 15% compounded monthly or 12% compounded…
A: Option-1 - 15% Compounding monthly Option-2 - 12% Compounding annually
Q: You are paying an effective annual rate of 8.974 percent on your credit card. The interest is…
A: Answer Effective Rate = (1 + Nominal Rate / n)n - 1 effective annual rate = 8.974% Number of…
Q: If a credit card charges 1½% interest every month, what are the nominal and effective interest rates…
A: The effective annual rate of interest is the real return on the savings account when the effects of…
Q: What amount will be accumulated by Php 1,520 in 10 semi annuals at 6% compounded bi-monthly? What…
A: Since you have asked multiple questions, we will solve the first question for you as per policy.…
Q: A firm charges its credit customers 1.67% interest per month. What is the effective interest rate?
A: Effective interest rate is the real return on savings account. It is given as: R = 1+inn-1
Q: wR389000nowandrepayitin25equalannualinstalments (payments will be made at the end of each year). If…
A: The given problem can be solved using PMT Function in excel. PMT function computes installment…
Q: you receive a credit card offer that charges interest at 1.75% per month compounded monthly. What is…
A: Information Provided: Interest rate = 1.75% Compiunding = monthly
Q: What is the effective annual interest rate for 10.5% compounded (a) Semiannually ? (b) quarterly…
A: Note: Since you have posted a question with multiple sub-parts, we will solve the first three…
Q: On January 31, 2009, the Annual Percentage Rate listed at Jeff’s bank for regular savings account…
A: Future value = Present value * (1+r)^n Where, r= rate of interest per period n = no. of compounding…
Q: Calculate and compare the effective rates of interest for saving accounts paying: (a.) a nominal…
A: Formula for computation of effective rates is as follows:Effective rates=1+rmn-1where,r=Interest…
Q: What is the Effective Annual Rate (EAR) on a deposit account with a stated Annual Percentage Rate…
A: The EAR is the actual rate of return earned on the investment whereas APR is simply a stated rate of…
Q: How much do ten ₱ 6,945 quarterly payments amount at present,
A: Time Value of Money (TVM) concept is used to discount the future cash flows or to compound the…
Q: You put $1,000 into a savings account today that offers a 5% APR with semi-annual compounding (i.e.,…
A: Effective annualized rate informs the rate effectively (considering the impact of compounding…
Q: What is the effective annual rate of a savings account with an annual interest rate of 5.9%…
A: Effective annual interest rate is referred as the interest rate which is adjusted for compounding…
Q: A bank charges interest rate of 5.50% on loans. The interest rate compounds monthly. What is the…
A: Effective Annual Rate: The effective yearly rate is the interest rate that is in effect for the…
- What is the effective annual rate (EAR) if your credit card charges you 10.45 percent compounded quarterly? Show your formula/calculation/explanation! Why is it different from annual percentage rate?
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- Q)If your credit card calculates interest based on 17.35% APR, compounded quarterly : a) What are your quarterly interest rate and annual effective interest rate? (b) If your current outstanding balance is $3,600 and you skip payments for three quarters, what would be the total balance three quarters from now? Note:-not use excelIf you borrow $9000 at an annual percentage rate (APR) of r (as a decimal) from a bank, and if you wish to pay off the loan in 3 years, then your monthly payment M (in dollars) can be calculated using: M = 9000 (er/12-1) / 1 - e-3r 1) Describe what M (0.035) would represent in terms of the loan, APR, and time. 2) If you are only able to afford a max monthly payment of $300, describe how you could use the above formula to figure out what the highest interest rate the bank could offer you and you would still be able to afford the monthly payments. In addition, determine the maximum interest rate that you could afford.You get a new credit card from your bank. The document that comes with the card informs you that the interest rate on that card is 24% APR with monthly compounding. What is the effective annual rate you'll actually be paying? Enter your answer as a percentage, rounded to 2 decimals, and without the percentage sign ('%'). For example, if your answer is 0.23456, then enter 23.46
- You get a new credit card from your bank. The document that comes with the card informs you that the interest rate on that card is 19.1% APR. What is the effective annual rate you'll actually be paying? The credit card company uses monthly compounding of interest. Enter your answer as a percentage, rounded to 2 decimals, and without the percentage sign ('%'). For example, if your answer is 0.23456, then enter 23.46 21.98Suppose you have received a credit card offerfrom a bank that charges interest at 1.4% per month,compounded monthly. What is the nominal interest(annual percentage) rate for this credit card? What isthe effective annual interest rate?Suppose that on January 1 you have a balance of $3100 on a credit card whose APR is 17%, which you want to pay off in 1 year. Assume that you make no additional charges to the card after January 1 a. Calculate your monthly payments.b. When the card is paid off, how much will you have paid since January 1?c. What percentage of your total payment from part (b) is interest?
- 1. Suppose that on January 1 you have a balance of $5600 on a credit card whose APR is 17%, which you want to pay off in 1 year. Assume that you make no additional charges to the card after January 1. a. Calculate your monthly payments. b. When the card is paid off, how much will you have paid since January 1? c. What percentage of your total payment from part (b) is interest? a. The monthly payment is? Then round to the nearest cent as needed.) 2. Compare the monthly payments and total loan costs for the following pairs of loan options. Assume that both loans are fixed rate and have the same closing costs. You need a $160,000 loan. Option 1: a 30-year loan at an APR of 8%. Option 2: a 15-year loan at an APR of 7.5%. Question content area bottom Part 1 Find the monthly payment for each option. The monthly payment for option 1 is $enter your response here. The monthly payment for option 2 is $enter your response here. (Do not round…Suppose your credit card issuer states that it charges a 17.00% nominal annual rate, but you must make monthly payments, which amounts to monthly compounding. What is the effective annual rate? a.16.08% b.16.88% c.15.27% d.17.72% e.18.39%Suppose your credit card issuer states that it charges a 24.00% nominal annual rate, but you must make monthly payments, which amounts to monthly compounding. What is the effective annual rate? O a. 26.29% b. 31.12% O c. 29.51% d. 26.82% e. 21.19%
- If your credit card calculates interest based on 17.35% APR, compounded quarterly : a) What are your quarterly interest rate and annual effective interest rate? (b) If your current outstanding balance is $3,600 and you skip payments for three quarters, what would be the total balance three quarters from now? Note:-not use excel to solveHow much is the monthly interest payment of National Co.?Match the following credit terms with the correct description. APR [Choose ] [Choose ] Known as the Annual Percentage Rate. Some credit cards charge these. They can be charged for membership and you may be required to pay them once a year. Credit cards that offer these give you cash or points for purchases you make. Occurs when you don't pay your monthly payment on time. These occur when you transfer your balance to a different card. When you move an existing balance to another credit card or account. The least amount of money you are obligated to pay back on a monthly basis to avoid fees and penalties. [Choose ] [Choose ] [Choose ] [Choose ] Fees Rewards Finance Charges Late fees Balance Transfer Minimum payment