In a dealer market, some dealers hold a certain inventory of specific securities and create a liquid market by purchasing and se
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Amortizing a loan P over n periods at i% interest / period, the payment per period is given by:
In given situation,
P=20000
period=month
i=10%/12
n=5*12=60 months
A. monthly payment amount
to the nearest cent
B. EAR (effective annual rate)
the APR is 10%, but compounded monthly.
So
EAR=(1+i/12)^12-1
=(1+0.1/12)^12-1
=0.104713
=10.4713% (effective annual rate)
In given situation,
P=20000
period=month
i=10%/12
n=5*12=60 months
A. monthly payment amount
B. EAR (effective annual rate)
the APR is 10%, but compounded monthly.
So
EAR=(1+i/12)^12-1
=(1+0.1/12)^12-1
=0.104713
=10.4713% (effective annual rate)
The investor will show a capital loss of $155.
We gather the following information from this question:
Pop of the fund three years ago : $12
NAV of the fund three years ago : $11.50
Current Pop : $11
Current NAV : $10.45
Number of shares : 100 shares.
We need to calculate capital loss or gain on the 100 shares in the mutual fund.
While taking the cost per unit, <u>we need to consider the public-offer-price (pop) into consideration, since an investor can only buy the shares at pop</u>.
Similarly, while selling the shares, the <u>shareholder can liquidate his position by selling back to the mutual fund at the NAV prevailing at the end of the business day</u> on which he wants to sell.
So, the formula to calculate capital gain or loss is: