Explanation:
an entrepreneur is always creative have ideas make best decision thinks before decision
Answer
The answer and procedures of the exercise are attached in a microsoft excel document.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
The interest earned by the Sherwood Day Corporation is calculated by subtracting from the net income all the expenses including the interest expense and the tax expense. Mathematically,
interest earned = $200,000 - ($40,000 + $30,000)
= $130,000
Answer: 12.68%
Explanation:
The Effective Annual Interest rate is the nominal interest rate adjusted for the number of compounding periods a financial product will experience in a period of time which is usually a year.
The formula is,
Effective annual interest rate = (1 + (nominal rate / number of compounding periods)) ^ (number of compounding periods) - 1
Plugging in the figures would give,
EAR = (1 + 0.01) ^ 12 - 1
EAR = 1.01^12 - 1
EAR = 12.68%
You might notice that in the bracket I did not divide the 1% by 12. This is because the 1% was already given as the month's interest rate.