All categories

3 years ago

The more frequently a bank compounds interest, _____ will be.

2 answers:

7 0

The answer is C. the higher the effective rate
Effective rate refers to the interest that actually paid for a certain amount of investment. Since compound interest is The addition of interest paid to the principal sum of a loan or deposit, more compound interest will increase the amount of interest rates that will be earned by the investor.

GaryK [48]3 years ago

5 0

The more frequently a bank compounds interest, the higher the APY will be, where APY stands for the annual percentage yield. It is the effective annual rate of return taking into account the effect of compounding interest Or in other words, APY is how much money you earn on a deposit over a year.

You might be interested in

All of the following are examples of a capital project EXCEPT

natta225 [31]

Answer:

Explanation:

purchasing ships to transport goods oversees

4 0

3 years ago

Suppose that you have returned from your fishing expedition with 20,000 fish. The market price is $3 per fish. Your average fixe

asambeis [7]

Answer:

The extra profit earned is $10,000

Explanation:

First, let us lay out the information given;

number of fish caught = 20,000

total variable cost = $5,000

average fixed cost = $1

total fixed cost = average fixed cost × number of fishes

= 20,000 × 1 = $20,000

Total cost = 20,000 + 5,000 = $25,000

Next let us calculate the total amount realized from sales before the price jump;

market price = $3

Total amount from sales = 3 × 20,000 = $60,000

profit made = selling price - cost price

= 60,000 - 25,000 = $35,000

Next let us calculate amount realized after the price jump;

new market price = $3.50

Total amount from new sales = 3.50 × 20,000 = $70,000

Profit = sales revenue - cost = 70,000 - 25,000 = 45,000

Finally to calculate the extra profit made, we will find the difference between new profit after price jump and the first profit made;

extra profit = new profit - old profit

= 45,000 - 35,000 = $10,000

6 0

3 years ago

What must be the first cost of Alternative B to make the two alternatives equally attractive economically at an interest rate of

Gelneren [198K]

Answer:

The answer is "21,622.98".

Explanation:

In the given question some information is missing, which can be defined in the given attachment.

To calculate the first cost we first subtract B cost is to X.

NPV = Cash Flow of the sum of PV amount

$PV = \frac{Flow of cash} {(1+i)^n} \\\\ \ Calculating \ the \ NPV \ of \ option \ A: \\\\$

$= \frac{-16600}{(1 + 0.08)^0}-\frac{2400}{(1 + 0.08)^1}-\frac{2400}{(1 + 0.08)^2} -\frac{2400}{(1 + 0.08)^3}-\frac{2400}{(1 + 0.08)^4}$

$= \frac{-16600}{1}-\frac{2400}{1.08}-\frac{2400}{1.16}-\frac{2400}{1.25}-\frac{2400}{1.36}$

$=-16600-2222.22-2068.96-1920-1764.70\\\\=-24,575.88$

The value of Option A or NPV = -24,575.88

The value of Option B or NPV:

$=-\frac{X}{(1 + 0.80)^0}-\frac{1000}{(1 + 0.08)^1} -\frac{1000}{(1 + 0.08)^2}-\frac{1000}{(1 + 0.08)^3}-\frac{1000}{(1 + 0.08)^4} \\\\ =-\frac{X}{(1.80)^0}-\frac{1000}{(1.08)^1} -\frac{1000}{(1.08)^2}-\frac{1000}{(1.08)^3}-\frac{1000}{(1.08)^4}$

$= -\frac{X}{1}-\frac{1000}{1.08}-\frac{1000}{1.16}-\frac{1000}{1.25}-\frac{1000}{1.36}\\\\= -X -555.55-862.06-800-735.29\\\\=-X -2952.9$

The value of Option B or NPV = -X -2952.9

As demanded

In Option B the value of NPV = In Option A the value of NPV

$-X -2952.9= -24,575.88\\\\-X= -21,622.98\\\\X=21,622.98\\$

7 0

4 years ago

During its first year of operations, Ivanhoe Company had credit sales of $2,781,600, of which $368,300 remained uncollected at y

Sergeeva-Olga [200]

Answer:

Explanation:

The journal entry to record the bad debt expense is shown below:

Bad debt expense A/c Dr $19,340

To Allowance for doubtful debts $19,340

(Being estimated uncollectible amount is recorded)

For recording this journal entry, we debited the bad debt expense account and credited the Allowance for doubtful debts so that the amount is correctly recorded in the correct item.

7 0

4 years ago

Consider the following statement: "The Fed has an easy job. Say it wants to increase real GDP by $200 billion. All it has to

Sati [7]

Answer:

The statement is incorrect

Explanation:

As the statement correctly describes, the money supply does not directly affect real GDP, what it affects directly is the interest rate, and the inflation rate, which are monetary variables, while GDP is a variable that measures output.

When the Fed increases the money supply, it may be doing so with the hope of stimulating economic activity, and thus, increasing GDP, but the Fed knows that any effect will be indirect. What will happen under this expansionary monetary policy is that the interest rate will fall, and as it falls, the supply of loans will grow, investment will become cheaper, and more investment means more factors of production, or more productivity, which in turn, increase the real GDP, but as it can be seen, the effect is indirect.

In fact, if the FED goes overboard with increasing the money supply, it may cause high inflation or even hyperinflation, and these events actually lead to less investment, less saving, and less economic activity, resulting in a probable stagnation or contraction of GDP.

4 0

4 years ago