If you cause a car accident which type of insurance will require you to pay the least out of pocket

First National Bank charges 13.4 percent compounded monthly on its business loans. First United Bank charges 13.7 percent compou

Wittaler [7]

Answer:

First National Bank-14.25%

First United Bank-14.17%

As a potential borrower, I would go for First United Bank, as it offers a lower rate, which implies a lower interest cost on the loan.

Explanation:

Effective Annual Rate (EAR) is the equivalent annual interest rate where the interest rate for a transaction is quoted to be compounded for a period shorter that a year.

Usually , where the interest nominal interest rate is quoted to be compounded for a shorter period than a year, the EAR is usually higher. The EAR is computed as follows using this formula:

EAR =( (1+r/m)^(m) - 1 ) × 100

r- nominal interest rate per annum, m- number of compounding periods in a year

So we can compute the EAR for the two banks :

First National Bank:

m= 12 compounding periods in a year

Monthly interest rate = r/m = 13.4%/12 = 0.01116

EAR = (1 + 0.01116)^(12) - 1

= 14.25%

First United Bank:

m = 2 compounding periods in a year

Semi-annual interest rate = 13.7%/2 = 0.0685

EAR = (1+0.0685)^(2) -1

= 14.17%

As a potential borrower, I would go for First United Bank, as it offers a lower rate, which implies a lower interest cost on the loan.

First National Bank-14.25%

First United Bank-14.17%

8 0

3 years ago

Can i eat flex tape<br> please answer i will give brainliest

forsale [732]

Answer:

Yea u can

Explanation:

3 0

3 years ago

Read 2 more answers

If the marginal propensity to consume is 0.8, full-employment output is $14 trillion, and current output is $13.5 trillion, then

CaHeK987 [17]

Answer:

c. Increase by $0.1 trillion

Explanation:

Investment spending Multiplier is a concept in economics that measure how a given change in investment increases output. So if current output of $13.5 trillion must increase to $14 trillion, we employ the multiplier formula to derive what amount of investment spending is needed to get $o.5trillion increase in output.

(change in output)/ (change in investment) = 1/(1-mpc)

Note that mpc means marginal propensity to consume.

Let change in investment = X

change in output = 14 - 13.5 = $0.5trillion

mpc = 0.8

(0.5)/X = 1(1-0,8)

0.5/X = 1/0.2

cross multiply

X = 0.1

Thus the needed change in investment is an increase of $0.1 trillion. In other words, if investment increases by $0.1 trillion, current output will increase from $13.5 trillion to $14 trillion.

3 0

3 years ago

The individuals or households that want goods and services for personal consumption or use, and have the resources to buy them a

olga nikolaevna [1]

The individuals or households that want goods and services for personal consumption or use, and have the resources to buy them are part of the consumers

<h3>Who are the consumers?</h3>

Consumers are known as the end users of any produced goods and services. They are crucial in the logistics chain in order to keep production running.

They are the set of individuals that want goods and services for their daily use and consumption purposes.

Learn more on consumers here: brainly.com/question/1213062

#SPJ12

4 0

2 years ago

You are scheduled to receive annual payments of $11,100 for each of the next 24 years. Your discount rate is 10 percent. What is

Lisa [10]

Answer:

The difference in the present value is $988.32.

Explanation:

The difference in the present value can be calculated using the following 3 steps:

Step 1: Calculation of the present value if you receive these payments at the beginning of each year

This can be calculated using the formula for calculating the present value (PV) of annuity due given as follows:

PVA = P * ((1 - (1 / (1 + r))^n) / r) * (1 + r) .................................. (1)

Where;

PVA = Present value if you receive these payments at the beginning of each year = ?

P = Annual payments = $11,100

r = interest rate = 10%, or 0.10

n = number of years = 24

Substitute the values into equation (1), we have:

PVA = $11,100 * ((1 - (1 / (1 + 0.10))^24) / 0.10) * (1 + 0.10)

PVA = $10,871.54

Step 2: Calculation of the present value if you receive these payments at the end of each year

This can be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PVO = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (2)

Where:

PVO = Present value if you receive these payments at the end of each year = ?

Other values are as defined in Step 1 above.

Substitute the values into equation (2), we have:

PVO = $11,100 * ((1 - (1 / (1 + 0.10))^24) / 0.10)

PVO = $9,883.22

Step 3: Calculation of the difference in the present value

This can be calculated as follows:

Difference in the present value = PVA - PVO = $10,871.54 - $9,883.22 = $988.32

3 0

3 years ago