What is the nominal annual interest rate if the effective annual rate is 5.5% and compounding is continuous?

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: The further in the future I receive any given pound amount, the higher its present value. Select…

A: Money has a time value. This means that the purchasing value of money decreases over time. Due to…

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: What would you expect the nominal rate of interest to be if the real rate is 5 percent and the…

A: We require to compute the nominal rate of interest in this question.

Q: Considering an interest rate i=14% per year, what is the compound interest rate equivalent to the…

A: Interest rate is 14% per year To Find: Equivalent compounded  interest rate for 45 days Equivalent…

Q: The nominal interest rate on a loan is 12.5% and inflation is 3%. What is the real interest rate?

A: Information Provided: Nominal Rate = 12.5% Inflation = 3%

Q: The principal P is borrowed and the loan's future value A at time t is given. Determine the loan's…

A: Simple interest is defined as an easy as well as quick method for the calculation of an interest on…

Q: If the nominal annual interest rate is 15%, what is the effective interest rate when interest is…

A: In this question We require to calculate the effective interest rate from below details: Nominal…

Q: Use the formula A=P(1+rt) to calculate the maturity value of the simple interest loan when…

A: formula: A=P(1+rt) where, p=principal r=rate  t=time in years

Q: what simple interest rate is equivalent to 1% compounded quarterly

A: Simple interest rate is the rate which does not compound means under this rate there is no concept…

Q: What is the effective annual interest rate when 12% per year is compounded quarterly? 0.13 or 0.23?

A: In this we have to calculate the effective interest rate annually.

Q: What is the equivalent effective rate of minal rate is 14.5%?

A: Nominal interest rate is interest rate without the impact of compounding but effective interest rate…

Q: What effective annual interest rate is equivalent to 9% compounded quarterly?

A: In this question we need to compute the effective annual interest rate compounded quarterly.

Q: b) An APR of 5.875 produces an effective annual interest rate of 6.04% what is the compounding…

A: The effective annual rate is the actual return that the company owes to its investors.

Q: If the effective annual interest rate is 15% then what is the equivalent annual rate compounded…

A: Effective annual rate (EAR) = 15% Number of compounding per year (m) = 4

Q: The principal P is borrowed and the loan's future value A at time t is given. Determine the loan's…

A: Future value (FV) is the value of a current asset based on an estimated rate of increase at a future…

Q: ffective rate?

A: The given problem can be solved using EFFECT function in excel. EFFECT function computes effective…

Q: What interest rate compounded bi-monthly is needed for an amount of P20,679 to increase to P30,550…

A: Using Excel Function:     With Formulas:

Q: If the effective interest rate is 15%, what nominal rate of interest is charged for a c compounded…

A: Compounding continuously is imaginary situation which actually does not exist in real life…

Q: 4. What is the effective annual interest rate i A savings account with 4% annual interest rate…

A: Details given to us are : Annual interest rate = 4% Compounding frequency = Monthly We need to…

Q: What is the nominal rate of interest compounded semi annually which is equal to 8.81% compounded…

A: Interest rate (APR) = 8.81% Compounding per year (M) = 4

Q: Hi there, I am trying to figure out how to calculate interest rates. If the interest rate is 3.75%…

A: Annual interest rate (r) = 3.75% or 0.0375Number of times compounding happens per year (n) = 4 (as…

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: 37. What rate of interest compounded quarterly will yield an effective interest rate of 7%?

A: The effective rate of interest is the rate under which the normal rate of interest is compounded for…

Q: What is the total amount you will pay if you do not pay the loan within the term and meet all the…

A: Step 1:Given: Loan amount = $5400Period of loan = 72 monthsFinal loan amount = $6965.35Interest is…

Q: Suppose that a savings account pays an effective rate of interest of 11.7 percent. What is the…

A: Equivalent Annual Compound Interest rate is the Actual rate of return calculated after compounding…

Q: Q1. (a) What effect does compounding interest more frequently than annually have on: (i) future…

A: Compound Interest is the interest on a deposit or loan calculated on the basis of initial interest…

Q: What would the loan payment amount and the interest payed for Kevan’s loan be if the PV=8500,…

A: The term loan payment amount refers to the total amount paid by an individual to pay off the loan…

Q: What is the effective rate of 16% interest compounded semiannually?

A: In this question we require to compute the effective rate of 16% interest compounded semi-annually

Q: The annual interest rate is 12%. Find (a) the semi-annual rate, (b) the quarterly rate, (c) the…

A: semi-annual rate is the rate that is compounded twice a year (i,e) for every six months is called…

Q: What is the internal rate of return on a $3,000 loan to be repaid as $3,500 twoyears from now?

A: An internal rate of return is the metric used in financial analysis for estimating potential…

Q: The (blank) interest rate is referred to as APR and the (blank) interest rate is the true rate…

A: Effective rate ( EAR) FORMULA: EAR =1+APRMM-1M = frequency of compounding

Q: Find the nominal interest rate compounded quarterly which could be used instea compounded monthly.…

A: In this we have to find effective interest rate in both cases and find equivalent rate.

Q: What is the 2-year discount factor if the interest rate is 4% in both years?

A: Under the concept of time value of money discounting factor refers to the rate or percentage that is…

Q: If the nominal annual interest rate is 15%, what is the effective interest rate when interest is…

A: Given, Nominal interest rate = 15% Compounded frequency = Monthly We need to compute the effective…

Q: What is the rate of interest per interest period if the nominal rate of interest is 25% compounded…

A: nominal rate of interest = 25% Compounded monthly No. of period = 12

Q: ) An interest rate of 5% compounded quarterly is equivalent to what rate compounded monthly?

A: Using excel Effective and Nominal Rate function

Q: The principal P is borrowed and the loan's future value A at time t is given. Determine the loan's…

A: In a simple interest rate , the interest is not compounded.In Simple interest,Future value (A) =…

Q: What is the effective rate (annually compounded rate) of interest corresponding to 9% compounded…

A: The effective annual rate (EAR) is the actual rate of interest that an investment earns over a year,…

Q: Which of the following statements is CORRECT? Question 2 options: a) The proportion of the payment…

A: A. OPTION (a): IS WRONGAS TIME PASSES, THE OUTSTANDING BALANCE OF LOAN DECREASES, SO INTEREST…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.