All categories

3 years ago

What is the effective annual rate (EAR)?

2 answers:

7 0

Answer: The effective annual rate (EAR) is the interest rate that would earn the same interest with annual compounding.

The Effective Annual Rate (EAR) is know as the interest rate earned on a subject/asset or remunerated on a borrowing as a consequence of compounding interest over period of time.

The formula to compute effective annual rate is as follow:

$Effective Annual Rate = [1 + \frac{interest rate}{compounding periods}]^{time periods} - 1$

∴ Option (c) is correct.

Furkat [3]3 years ago

6 0

Answer:

The correct option here is C) .

Explanation:

The EAR (effective annual interest rate) which is also know as annual equivalent rate, is the interest rate which is either earned or it is paid on a loan or an investment or any financial product because of the compounding done over a defined period of time. This rate comes in very handy when one has to compare different products like loans or certificate of deposits.

FORMULA -

= ( 1 + i / n )^n - 1

where i = interest rate(NOMINAL ) and n = number of periods

You might be interested in

What is the purpose of a thesis?

Marrrta [24]

Answer:

C. It states what your paper will prove

Explanation:

Sorry if it wrong

8 0

3 years ago

The delivered equipment cost for setting up a production and assembly line for two-way floating ball valves is $650,000. If the

Rom4ik [11]

Answer:

$2,034,500 ; A

Explanation:

In this question, we are asked to calculate cost estimate.

One of the methods which we can use to do this is the cost factor technique.

Mathematically, the estimated total cost will be;

Ct = hCe

Where Ce refers to cost at major equipment and h is the overall cost factor.

From the question, we can identify the following;

Ce is $650,000 while h = 1.82 + 1 + 0.31 = 3.13

Inputing these values in the formula, we have;

Ct = $650,000 * 3.13 = $2,034,500

4 0

3 years ago

Read 2 more answers

What element of a crisis management plan defines the process that should unfold once an issue or crisis is identified

MrRa [10]

The decision tree is the element of a crisis management plan.

<h3>What is the decision tree?</h3>

The component of a crisis management strategy called the Decision Tree outlines the steps that should be taken once a problem or crisis has been discovered.

The Decision Tree also specifies which team members should be involved, when publishing activities should be paused, and who will determine when a crisis is finished and regular social media operations can resume.

These trees are very useful for assessing numerical data and coming to a numerically-based judgment.

Learn more about the decision tree here:

brainly.com/question/12975851

#SPJ4

6 0

2 years ago

g Based on a predicted level of production and sales of 22,000 units, a company anticipates total variable costs of $99,000, fix

lbvjy [14]

Answer:

Total contribution margin= $60,000

Explanation:

First, we need to calculate the actual contribution margin:

Contribution margin= net income + fixed costs

Contribution margin= 36,000 + 30,000= $66,000

Now, the unitary contribution margin:

Unitary contribution margin= 66,000/22,000= $3

Finally, the total contribution margin for 20,000 units:

Total contribution margin= 3*20,000= $60,000

4 0

3 years ago

onds Payable has a balance of $1,000,000 and Discount on Bonds Payable has a balance of $10,000. If the issuing corporation rede

posledela

Answer:

The correct answer is $15,000.

Explanation:

According to the scenario, the given data are as follows:

Bonds payable balance = $1,000,000

Discount on bonds = $10,000

So, Balance in bonds = $1,000,000 - $10,000

= $990,000

Rate of bonds = 97.5

So , we can calculate the amount of gain or loss on redemption by using following formula:

First we calculate number of bonds = $1,000,000/$100

= 10,000

Now, we multiply the remaining by bond rate, we get

= 10,000 × 97.5

= 97,500

So, now we can calculate gain by using following method:

Gain = $990,000 - $975,000

= $15,000

Hence, the amount of gain is $15,000.

7 0

3 years ago

What is the effective annual rate​ (EAR)?

What is the effective annual rate (EAR)?