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ruslelena [56]
3 years ago
14

Your local pawn shop loans money at an annual rate of 23 percent and compounds interest weekly. What is the actual rate being ch

arged on these loans? A. 26.56 percent B. 25.16 percent C. 26.49 percent D. 25.80 percent
Business
1 answer:
Eddi Din [679]3 years ago
6 0

Answer:

D. 25.80 percent

Explanation:

The formula to compute the effective annual rate of the loan is shown below:

= (1 +  annual interest rate ÷ periods)^ number of period - 1

= (1 + 23% ÷ 52)^52 - 1

= (1 + 00442)^52 - 1

= 1.00442^52 - 1

= 1.2579618615  - 1

= 25.80%

There are 52 weeks in a year and we considered the same in the above calculation

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Trish receives $450 on the first of each month. Josh receives $450 on the last day of each month. Both Trish and Josh will recei
Svetach [21]

Answer:

$141.80

Explanation:

Calculation for the difference in the present value of these two sets of payments

First step is to calculate for the PVA Due

PVA Due = $450 × [(1 - {1 / [1 + (.095 / 12)]^(4 × 12)}) / (.095 / 12)] × [1 + (.095 / 12)]

PVA Due = $18,053.58

Second step is to find the PVA

PVA = $450 × [(1 - {1 / [1 + (.095 / 12)]^(4 × 12)}) / (.095 / 12)]

PVA= $17,911.78

Since we have know both the PVA Due and the PVA the last step will be to know the difference between the both sets of payments using this formula

Difference= PVA Due - PVA

Difference = $18,053.58 - 17,911.78

Difference= $141.80

Therefore the difference in the present value of these two sets of payments will be $141.80

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4 years ago
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4 years ago
Supermarkets often offer a great deal on milk, beef or eggs to get customers into their stores, knowing many customers will then
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3 years ago
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2. Distribution: The distribution of the product through new channel will aid the development of the product in the new market.

3. Product development: the development of a new product will help penetrate the new market as the product is new and customers might like to try it out.

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4 years ago
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