Answer:
The actual effective annual rate is <u>3.33%</u>.
Explanation:
Effective Annual Rate (EAR) refers to an interest rate has been adjusted for compounding over specified period of time.
Effective annual rate can therefore be described as the interest rate that paid to an investor in a year after compounding has been adjusted for.
Effective annual rate can be computed using the following formula:
EAR = [(1 + (i / n))^n] - 1 .............................(1)
Where;
i = Annual interest rate claimed by the dealer = 3.28%, or 0.0328
n = Number of compounding periods or months = 12
Substituting the values into equation (1), we have:
EAR = [(1 + (0.0328 / 12))^12] - 1 = 0.0332976137123635
EAR = 0.0333, or 3.33% approximately.
Therefore, the actual effective annual rate is <u>3.33%</u>.
Answer:
b. 20
Explanation:
For 5 flights per month
Total Cost = Variable cost + Fixed cost
Total Cost = Fuel, crew, and airplane maintenance cost + Airport fee
Total Cost = (5 X 10000) + 20,000 = $70,000
For 6 flights per month
Total Cost = Variable cost + Fixed cost
Total Cost = Fuel, crew, and airplane maintenance cost + Airport fee
Total Cost = (6 X 10000) + 20,000 = $80,000
Additional Cost for 6th flight = $80000-70,000 = $10,000
Minimum No. of Passenger to cover the cost = Additional cost / Ticket price per seat
Minimum No. of Passenger to cover the cost = $10,000 / $500 = 20 seats passengers.
Answer:
B. levied on purchases of a particular good or service.
Explanation:
- A sales tax is a tax that is given to the government body and is provided to the production of the particular goods and the services and its a set of the sales.
- The crucial good and services and at the point of the purchase, and is directed by the consumers and is called as used tax. And includes the manufacturer's sales and wholesales tax and gross receipt and exercise tax and values added tax.
Answer:
€928.46
Explanation:
Since it was hinted that bonds issued outside of the United States pay coupons annually, it is expected that the bonds issued in Germany pay annual coupons, and its price is computed below using the bond price formula, excel PV function, and financial calculator:
Bond price=face value/(1+r)^n+annual coupon*(1-(1+r)^-n/r
face value=€1,000
r=yield to maturity=8.7%
n=number of annual coupons in 10 years=10
annual coupon=face value*coupon rate=€1,000*7.6%=€76
bond price=1000/(1+8.7%)^10+76*(1-(1+8.7%)^-10/8.7%
bond price=1000/(1.087)^10+76*(1-(1.087)^-10/0.087
bond price=1000/2.30300797+76*(1-0.43421474)/0.087
bond price=1000/2.30300797+76*0.56578526/0.087
bond price= 434.21+494.25= €928.46
Excel PV function:
=-pv(rate,nper,pmt,fv)
=-pv(8.7%,10,76,1000)
pv=€928.46
Financial calculator:
N=10
PMT=76
I/Y=8.7
FV=1000
CPT PV=€928.46
Answer:
2.21%
Explanation:
The internal rate of return is the rate of return on the project where the present value of future cash flows equals the initial investment outlay. It is known as the break-even discount rate since, at IRR, the net present value is zero.
The IRR can be determined using the excel IRR function as shown thus:
=IRR(values)
values are the cash flows from years 0-4
Find attached excel file for IRR computation
