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tresset_1 [31]
3 years ago
15

Assume the $19,500 Treasury bill, 4% for 15 weeks. Calculate the effective rate of interest.

Business
1 answer:
Svet_ta [14]3 years ago
6 0
The effective interest rate is calculated through the equation,
                               ieff = (1 + i/r)^r - 1
where ieff is the effective interest, i is the nominal interest, and r is the number of 15 weeks in a year. Every year, there are 52 weeks. Thus, there are 3.467 15-weeks approximately. Substituting this into the equation,
                                  ieff  = (1 + 0.04/3.467)^3.467 - 1
                                  ieff = 0.04057
                                     ieff = 4.057%
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The equation for Edmund's budget line is 6C - 24G = 48

Explanation:

A budget line shows all possible combinations of two commodities that a consumer can buy at a given income level and at given market prices of commodities. The equation of the budget line is as follows.

M = (Px).X + {Py).Y where

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In this question, Edmund's income is $48. Let C represent the units of punk rock video cassettes that he buys. Each one costs $6.

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