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amm1812
3 years ago
8

The number of compounding periods in one year is called compounding frequency. The compounding frequency affects both the presen

t and future values of cash flows. An investor can invest money with a particular bank and earn a stated interest rate of 4.40%; however, interest will be compounded quarterly. What are the nominal, periodic, and effective interest rates for this investment opportunity?
Interest Rates
Nominal rate 4.40%
Periodic rate 1.10%
Effective annual rate 4.47%
Rahul needs a loan and is speaking to several lending agencies about the interest rates they would charge and the terms they offer. He particularly likes his local bank because he is being offered a nominal rate of 4%. But the bank is compounding daily. What is the effective interest rate that Rahul would pay for the loan?
a. 4.081%
b. 4.202%
c. 3.959%
d. 4.395%
Another bank is also offering favorable terms, so Rahul decides to take a loan of $22,000 from this bank. He signs the loan contract at 9% compounded daily for nine months. Based on a 365-day year, what is the total amount that Rahul owes the bank at the end of the loan's term? (Hint: To calculate the number of days, divide the number of months by 12 and multiply by 365.)
a. $24,477.81
b. $24,948.54
c. $23,536.36
d. $24,007.09
Business
1 answer:
Anastasy [175]3 years ago
3 0

Answer:

1. a. 4.081%

2. c. $23,536.36

Explanation:

1. Periodic rate=(4.4%/4) = 1.1%

EAR=(1+APR/m)^m-1

where m=compounding periods

= (1+0.044/4)^4-1

= 1.011^4 - 1

= 1.04473133864 - 1

= 0.04473133864

= 4.47%

EAR=(1+APR/m)^m-1

where m=compounding periods

=(1+0.04/365)^365-1

= (1+0.00010958904)^365 - 1

= 1.00010958904^365 - 1

= 1.04080849272 - 1

= 0.04080849272

= 4.081%

2. A=P(1+r/365)^365*n

where  A=future value, P=present value, r=rate of interest, n=time period.

= 22000*(1+9%/365)^(9/12*365)

= $23,536.36

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Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
bekas [8.4K]

Answer:

$10, 950

Explanation:

What is the net operating income (loss) for the month under the variable costing?

Direct materials   $  20

Direct labour      62

Variable manufacturing overheads  8

Total variable costs    90

Sales ($120 x 8, 650)     $ 1, 038, 000

Variable expenses:

Variable cost of goods sold ($90 x 8650)    778, 500

Variable selling admin costs ($12 x 8, 650)   103, 800

Contribution margin      155, 700

Fixed expenses:

Fixed manufacturing overheads     135, 750

Fixed selling and admin       9, 000

Net operating profit      10, 950

7 0
3 years ago
George murdock discovered that only a few jobs were consistently male-dominated in his study of 324 societies around the world.
Lana71 [14]
H<span>e considered all of the following as male-dominated jobs except for taking care of cattle.
This job is either balanced between men and women, or is female-dominated completely, according to George Murdock. Based on his study, he concluded that men usually dominate in jobs such as pursuing sea mammals, hunting, and making weapons, whereas that is not the case with taking care of cattle.
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6 0
3 years ago
Determine the order in which the following budgets are generally prepared.
xenn [34]

Answer:

The order in which the following budgets are generally prepared are as arranged below:

1. Sales budget

2. Production budget

3. Material purchases budget

4. Budgeted income statement

In an attempt to expatiate the decision above. We must observe that income statement starts with revenue. Similarly here, the budget will starts with sales. The revenue section is followed by production budget which from which various budgets like material, direct labor and overhead budget are prepared from. After the Production budget, follow the Material purchase budget, then Budgeted Income Statement

5 0
3 years ago
Which of these contains data that identifies a product?
zmey [24]

Answer:

A. UPC

Explanation:

A UPC is an acronym for universal product code. UPC is typically used for the identification of a specific product and its manufacturer (vendor) through a unique code that is printed on the product.

Basically, a universal product code (UPC) comprises of two (2) main parts;

  • A machine-readable barcode that contains sets of vertical black lines.
  • A unique twelve (12) digit number placed beneath or adjacent to the machine-readable barcode.

The first six-digits of the UPC represents the manufacturer and is printed on all of its products while the next five-digits is the product's unique reference number (item number) and the last digit is typically known as a check digit, used for the verification of the authenticity of a UPC.

Generally, the universal product code are usually scanned with a barcode scanner and this makes it easier to identify a product, as well as its price.

<em>Hence, a universal product code (UPC) contains data that identifies a product. </em>

6 0
3 years ago
Shelly’s preferences for consumption and leisure can be expressed as U(C, L) = (C – 100) * (L – 40). This utility function impli
ludmilkaskok [199]

Answer:

Explanation:

U(C, L) = (C – 100) × (L – 40)

(a) C = (w - t)[110 - L] + 320

C = 10[110 - L] + 320

C + 10L = 1420

where,

C- consumption

w - wages

t - taxes

L - Leisure

(b) Given that,

L = 100 then,

C = 420

MRS=\frac{MU_{L} }{MU_{C} }

MRS=\frac{C-100 }{L-40}

MRS=\frac{320}{60}

              = 5.33

(c) L = 110

C = 320

Reservation wage:

MRS=\frac{C-100 }{L-40}

MRS=\frac{220}{70}

= 3.14

(d) At optimal level,

\frac{C-100}{L-40}=\frac{10}{1}

C - 100 = 10L - 400

C - 10L = -300

C = 10L - 300

Using budget constraint:

C + 10L = 1420

10L - 300 + 10L = 1420

20L = 1720

L* = 86 and C* = 560

4 0
3 years ago
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