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Natali [406]
2 years ago
12

Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $250.00

at the end of each quarter and then pay off the principal amount at the end of the year. What is the effective annual rate on the loan
Business
1 answer:
IRISSAK [1]2 years ago
6 0

Answer:

10.38%

Explanation:

From the question above a bank offers to lend an amount of $10,000 for a period of 1 year

The bank expects an interest of $250 to be paid every 4 months

= $250×4

= $1,000

Total amount of interest= $1,000

The first step is to calculate the nominal interest

= (1000/10,000)×100

= 0.1×100

= 10%

Therefore, the effective annual rate on the loan can be calculated as follows

= (1+r/m)^m-1

r = 10% , m = 4

= [1+(10/100)/4]^-1

=[ (1+0.1/4)^4]-1

= (1+0.025^4)-1

= (1.025^4)-1

= 1.1038-1

= 0.1038×100

= 10.38%

Hence the effective annual rate in the loan is 10.38%

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A responsibility report is usually presented by a division that is an investment center.  An investment center has responsibility for return on investments.

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I am so coufued "what i am going to in future, i am very good in art and math and cooking and pe?
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Answer:

The correct answer is False.

Explanation:

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Vaseline, the world's most famous—and priciest—brand of petroleum jelly, wants to improve its financial performance (i.e. revenu
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Please consider the following explanation

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Vaseline can incorporate extra ingredients like aloevera, or turmeric, etc, i.e. the beauty or health fashions prevalent in the market this information can be obtained by a thorough research of the beauty blogs available online.

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Karla Salons leased equipment from Smith Co. on July 1, 2021, in a finance lease. The present value of the lease payments discou
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Answer:

d. $5,204

Explanation:

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Therefore, the total decrease in earnings (Pretax) in Larlas December 31, 2021 Income statement would be

= Interest expenses + Depreciation Expenses

= $2,124 + $3,080

= $5,204

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3 years ago
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