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o-na [289]
1 year ago
9

An online bank is offering to pay 0.25 % interest per month on deposits. Your local bank offers to pay 0.75 % interest quarterly

(every 3 months). Which is the higher interest rate?
Business
1 answer:
Liono4ka [1.6K]1 year ago
4 0

Both have the same interest rate which is 3%.

<h3>What is interest?</h3>
  • In finance and economics, interest is the payment of an amount above the repayment of the principal sum by a borrower or deposit-taking financial institution to a lender or depositor at a specific rate by a borrower or depositor.
  • It differs from a fee that the borrower may pay to the lender or a third party.

To find the higher interest rate:

Given that,

  • Interest rate per month = 0.25%
  • Interest rate per quarter = 0.75%

If we calculate the annual interest for monthly and quarterly rates, it will be:

Monthly

  • No. of months in a year = 12
  • Monthly rate = 0.25%

So,

  • Annual Interest = 0.25 × 12
  • = 3%

Quarterly

  • No. of quarters in a year = 4
  • Quarterly rate = 0.75%

So,

  • Annual Interest = 0.75 × 4
  • = 3%

Therefore, both have the same interest rate which is 3%.

Know more about your interests here:

brainly.com/question/2294792

#SPJ4

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Answer:

4

Explanation:

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The bank also hold 1,800,000 in total deposits

Therefore the deposits expansion multiplier can be calculated as follows

= 1,800,000/450,000

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Hence the deposits expansion multiplier is 4

7 0
2 years ago
On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest payments are paid annually, each
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Answer:

The correct answer is "$15,000".

Explanation:

Given:

Value,

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Interest rate,

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The Interest Payment will be:

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6 0
2 years ago
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Answer:

the after-tax cost of debt is 13.24

Explanation:

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The after-tax cost of debt is dependent on the incremental tax rate of a business. If profits are low, a business would pay low tax rate, which means that the after-tax cost of debt will increase. Also, if the business profits increase, they would pay higher tax rate, so its after-tax cost of debt will decline.

Given that:

Required return (r) = 11.50% = 0.0115

The yield on a 20-year treasury bond (y) = 5.50% = 0.055

beta (b) = 1.29

rs = y + (r -y) x b

after-tax cost of debt = 5.50% + (11.50% - 5.50%) x 1.29

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5 0
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Under U.S. GAAP, if the carrying value of a fixed asset was $50,000, the undiscounted expected future cash flows was $55,000, th
ira [324]

Answer:

$0

Explanation:

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Discounted Value = $51,000

There is no Impairment loss on this asset as the fair market value is more than the book value of the asset.

7 0
3 years ago
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Answer:

B

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