Answer: 6.40%
Explanation:
Use Excel to calculate this by the formula;
= RATE(Nper,Pmt,-Pv,Fv)
Nper is number of periods = 20 * 2 = 40 semi annual periods
Pmt is the payment = $6%/2 * 1,000 = $30
Pv is the present value = $955
Fv is future value or face value = $1,000
= RATE (40,60,-955,1000)
= 3.20% * 2 (because this is a semi annual rate)
= 6.40%
Answer:
A. Management's minimum required balance.
Explanation:
The minimum balance is the minimum dollar sum that a client must have in an account to get some service benefit, for example, keeping the account open or getting premium.
Answer:
PV(after-tax net return in 7th year) = 70.55 (Approx)
Explanation:
Given:
Number of year = 7
Pre-tax net returns (Fn) = $100
Growth rate = 4% = 0.04
Inflation = 3% = 0.03
Marginal tax rate = 30% = 0.3
Discount rate = 10% = 0.1
Computation:
Fn = Fo(1+g)ⁿ = 100(1.04)⁷
Fn = 131.6
Nominal net returns = 131.6(1.03)⁷
Nominal net returns = 161.85
After tax return = 161.85 (1 - 0.3)
After tax return = 113.30
After-tax, risk adjusted discount rate = 0.1(1-0.3) = 7%
PV(after-tax net return in 7th year) = 113.30
(1+0.07)⁻⁷
PV(after-tax net return in 7th year) = 70.55 (Approx)
Answer:
A fixed interest rate loan is a loan where the interest rate doesn't fluctuate during the fixed rate period of the loan.
Explanation:
a fixed rate could also be calculated if you want to know how to calculate fixed rate i could tell you