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2 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]2 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

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How can investors receive compounding returns? A: by selecting a savings account that has a higher interest rate B: by investing

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I would choose A. But that's a recommended answer from my teacher

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3 years ago

The risk-free rate of return is 10.5%, the expected rate of return on the market portfolio is 17%, and the stock of Xyrong Corpo

nadezda [96]

Answer:

$88.24

Explanation:

The computation of the intrinsic value of a share of Xyrong stock is shown below;

k = risk free rate of retunr+ beta[expected market rate of return - risk free rate of return]

= 10.5% + 1.5(17% - 10.5%)

= 20.25%

Now

growth rate = b × ROE

= .5 × 24%

= 12%

Now the intrinsic value of the stock is

= (($13 × 50%) × (1 + 0.12)) ÷ (0.2025 - 0.12)

= $88.24

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3 years ago

A note to the financial statements of the First Security Bank indicates that the company self insures itself for the first $500,

trapecia [35]

Answer:

A standard unmodified opinion.

Explanation:

When a note to the financial statements of the First Security Bank indicates that the company self insures itself for the first $500,000 of liability to employees, with liability insurance for the remainder. Based upon this, one would expect the auditors' report to express a standard unmodified opinion.

A standard unmodified opinion is an opinion where financial statements are presented free of any misinterpretation, in all material respects, in accordance with standards known as Generally Accepted Accounting Principles (GAAP) to provide a high level of assurance.

The standard unmodified opinion comprises of report title, audit report address, introduction paragraph, managements responsibility, auditor's responsibility, opinion paragraph, audit report date and signature and address of certified public accountant firm.

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2 years ago

Read 2 more answers

Lindsey needs a car to get back and forth from her home in the city to her university, which are 4 miles apart. When shopping fo

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Answer:

Impulse Buying

Explanation:

She isn't thinking about the long term effects of her purchase, like the repayments, but is instead thinking about her short term gain.

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3 years ago

Adam Holmes is the Processing Manager of Empire Mortgage Company, a firm that processes loan applications for a number of region

Elina [12.6K]

Answer:

a. Labor variances for 14 PT staff:

Labor rate variance = (Standard Rate – Actual Rate) x (Actual time per app) * (number of apps. completed)

= ($50 - $52) x 1.40 x 2,604

= $7291.20 (Unfavorable)

Labor Efficiency variance = [(Standard hours per app. X number of app.) - (Actual time per App. * number of apps.)] * Std. rate

= [(1.20 * 2,604) - (1.40 * 2,604)] * $50

= [3,124.80 - 3,645.60] * $50

= $26,040 (Unfavorable)

Labor Cost variance = Labor rate variance + Labor efficiency variance

= $7,291.20 (Unfavorable) + $ 26,040 (Unfavorable)

= $33,331.20 (Unfavorable)

Labor variances for 10 SD staff:

Labor rate variance = (Standard Rate – Actual Rate) x (Actual time per app) * (number of apps. completed)

= ($45 - $47) * 1.20 * 1,600

= $3840 (Unfavorable)

Labor Efficiency variance = [(Standard hours per app. X number of app.) - (Actual time per App. * number of apps.)] * Std. rate

= (1.40*1,600) – (1.20*1,600)]*$45

= [2,240 – 1,920] * $45

= $14,400 (Favorable)

Labor Cost variance = Labor rate variance + Labor efficiency variance

= $3,840 (Unfavorable) + $ 14,400 (Favorable)

= $10,560 (Favorable)

5 0

3 years ago

What is the effective annual rate​ (EAR)?

What is the effective annual rate (EAR)?