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Anarel [89]
3 years ago
11

You are considering a car loan with a stated APR of 5.42​% based on monthly compounding. What is the effective annual rate of th

is​ loan? The effective annual rate is nothing​%. ​ (Round to two decimal​ places.)
Business
1 answer:
Anon25 [30]3 years ago
6 0

Answer:

The effective annual rate is 5.57%

Explanation:

The interest rate that is actually earned or paid on investment or loan including the compounding effect over a given period of time. It is also known as rate.

Effective interest rate = [ ( 1 + r/m )^m ] - 1

Effective interest rate = [ ( 1 + 5.42%/12 )^12 ] - 1

Effective interest rate = [ ( 1 + 0.0542/12 )^12 ] - 1

Effective interest rate = 0.055567 x 100

Effective interest rate = 5.5667% = 5.57%

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Answer:

The Matching Principle

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The Matching Principle of accounting holds that revenues should be matched with expenses. Hence the name.

This is to say, that revenues should only be recognized when the associated expenses with those revenues have been spent.

For example, in numeral a), we can see that Norfolk Southern Corporation recieved cash in advance, but it only recognized revenue once it had performed the services associated with that cash collection.

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Answer:

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