Question
In: Finance
If interest is paid twice a year, which method of interest calculation would provide a greater...
If interest is paid twice a year, which method of interest calculation would provide a greater amount?
A. Simple
B. Compounded
C. they would be the same
Solutions
Expert Solution
Ans B. Compounded
If interest is paid twice a year, Compounded interest calculation would provide a greater amount.
| FV = | Future Value |
| PV = | Present Value |
| r = | rate of interest |
| n= | no of period |
| COMPOUND INTEREST | |
| FV = | PV (1 + r )^n |
| FV = | 1000*(1+5%/2)^2 |
| FV = | 1050.63 |
| SIMPLE INTEREST | |
| FV = | PV + PV * Rate * Time |
| FV = | 1000 + 1000 * 5%*1 |
| FV = | 1050.00 |
jeff jeffy answered 2 years agoRelated Solutions
Which of the following is false? A. The greater the interest rate, the greater the present...
Which of the following is false?
A. The greater the interest rate, the greater the present value,
given a $100 future value and holding the time period constant.
B. The discount factor is the reciprocal of the compound
factor.
C. The longer the time period, the smaller the present value,
given a $100 future value and holding the interest rate
constant.
D. A future dollar is always less valuable than a dollar today
if interest rates are positive.
Which of the following transactions would be included in the official calculation of GDP under the expenditure method?
Which of the following transactions would be included in the official calculation of GDP under the expenditure method? You make cookies to give as a gift to your parents. You buy a new iPod for listening to music. You illegally download music off the Internet to put on your new iPod. Bridgestone sells $2 million worth of tyres to General Motors Holden. A student buys a used textbook at the bookstore.
Would you think twice about investing in a sin fund if historical returns showed greater growth...
Would you think twice about investing in a sin fund if
historical returns showed greater growth potential than SRI funds?
What is the justification for you decision?
The book is Strategic Corporate Social Responsibility CSR
chapter#7,8
Shirley borrowed $1,500 to buy some new furniture, but she doesn’t know which interest calculation method...
Shirley borrowed $1,500 to buy some new furniture, but she
doesn’t know which interest calculation method was used on her
purchase. Calculate monthly payments assuming a 1 year
repayment period and 14% interest. Now assume the store
uses add-on method of interest calculation, calculate the monthly
payment and total cost assuming a 1 year repayment period but only
a 12% interest charge. Why at a lower interest rate,
does the add-on method of interest calculation result in higher
monthly payments? (1)
Assume federal funds rate is greater than the interest rate paid on reserves. What happens to...
Assume federal funds rate is greater than the interest rate paid
on reserves. What happens to the federal funds rate when the Fed
increases the interest rate on reserves? Draw the graphand
explain.
Assume federal funds rate is greater than the interest rate paid on reserves. What happens to...
Assume federal funds rate is greater than the interest rate paid
on reserves. What happens to the federal funds rate when the Fed
increases the interest rate on reserves? Draw the graph and explain
in simple terms
Which of the following transactions, if it was included in the calculation of GDP, would lead...
Which of the following transactions, if it was included in the
calculation of GDP, would lead to an overstated GDP figure?
A)
buying a new set of golf clubs
B)
the purchase of a special fabric adhesive by a furniture company in
California
C)
buying asparagus for dinner, even though it is really
expensive
D)
hiring a babysitter and paying him or her under the table
Which of the following transactions would NOT be included in the GDP calculation of a country?...
Which of the following transactions would NOT be included in the
GDP calculation of a country?
A.supplemental income paid by the government to a disabled
person
B.the value of an increase in unsold inventory of a company
C.salary of a soldier in a country's army
D.price of a new office building
A corporate bond pays interest twice a year and has 18 years to maturity, a face...
A corporate bond pays interest twice a year and has 18 years to
maturity, a face value of $1,000 and a coupon rate of 5.6%. The
bond's current price is $1,359.59. It is callable starting 12 years
from now (years to call) at a call price of $1,106.
What is the bond's (annualized) yield to call?
For which of the following markets would there be a greater increase in total welfare if...
For which of the following markets would there be a greater
increase in total welfare if government were able to intervene and
regulate prices: OPEC or the music industry?
Explain your answer.
The music industry because it is a colluding oligopoly and is
more inefficient.
OPEC because it is a colluding oligopoly and is more
efficient.
The music industry because it is not a colluding oligopoly and
is more inefficient.
OPEC because it is a colluding oligopoly and is more...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- What are the benefits of doing a pilot program before a full scale rollout of a...
- It is a calm summer day in southeast Iowa at the Ottumwa air traffic control radar...
- 1. Write a detailed article on Evolution of attacks on the internet & web [your article...
- Analyze the role of the contingency plan coordinator (CPC) in the scope of preparing a BIA....
- Amazing Manufacturing, Inc., has been considering the purchase of a new manufacturing facility for $500,000. The...
- LANGUAGE: JAVA Create a New Project called YourLastNameDomainName. Write a DomainName class that encapsulates the concept...
- On January 1, 2015 $20,000,000 of 20 year bonds were issued with a coupon rate of...
ADVERTISEMENT