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nexus9112 [7]
2 years ago
14

Interest rates are expressed as a percentage of

Business
2 answers:
kvasek [131]2 years ago
8 0

Interest rates are expressed as a percentage of<u> loans</u>.

Interest rates is expressed as a percentage of the principal amount, that is, the money borrowed in form of loan, or money deposited.

<h2>Further Explanation </h2>
  • The money borrowed from a financial institution in form of a loan attracts an interest which is expressed as a percentage of the principal amount borrowed.
  • Interest is therefore the amount of money charged by a financial institutions such as banks or Sacco’s on money borrowed from them by customers.  
  • Interest is expressed as a percentage of the principal amount borrowed from these financial institutions.
  • Furthermore, money deposited to financial institutions by customers for longer terms may earn them interest depending on the type of account the customer holds with the lending institutions.
  • Fixed deposit accounts for example earns an interest to the customer for any money deposited within a given period of time.
<h3>Types of Interest on Loans </h3><h3>Simple interest </h3>
  • This is a type of interest which is a set rate on the principle amount lent to the borrower, such that the borrower pays for the privilege of borrowing money.  
  • For example, if an individual borrowed $ 1000, on simple interest at a rate of 10% per annum, for a period of two years, then the customer would pay $200 interest at the end of two years plus the principle borrowed, which totals to $1200.

<h3>Compound interest. </h3>
  • Compound interest is the interest charged on both the principle and the accumulating interest charged on the amount borrowed. Compound interest is the most common type of interest with money lending institutions.
  • Therefore, if an individual borrowed $ 1000 and charged compound interest at a rate of 10% per annum, for a period of two years, then the customer would pay a total amount of $ 1210 at the end of two years.

Keywords: Interest, interest rate, loans

<h2>Learn more about; </h2>
  1. Compound interest formula: brainly.com/question/10184698
  2. Simple interest formula: brainly.com/question/12164462
  3. Interest rate calculation: brainly.com/question/3256069

Level: High school  

Subject: Business

Topic: Simple and compound interest  

Sub-topic: Interest rates

Tomtit [17]2 years ago
6 0
Basically, an interest rate is an amount that is added on top of the principal amount most especially in loans. This is expressed in a form of percentage, depending on the amount and interest rate being agreed upon. The answer for this would be the second option. Hope this helps.
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Answer:

1. Will you be able to meet your goal at this current saving rate?

  • yes, you will even have some spare money

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monthly salary = 25,000 and you will deposit 12,500

ordinary annuity, 0.8333%, 59 periods (5 years - 1 month) = 75.80535

the future value of your account = 12,500 x 75.80535 = 947,566.88 which is more than the cost of the MBA

2. What percentage of your salary should you save if you want to have exactly your university expenses amount?

  • 42.2138%

800,000 / 75.80535 = 10,553.34

10,553.34 / 25,000 = 0.422138 = 42.2138%

3. How would your answer to part 1 change if the saving account rate changed to 5%?

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monthly salary = 25,000 and you will deposit 12,500

ordinary annuity, 0.41666%, 59 periods (5 years - 1 month) = 66.72805

the future value of your account = 12,500 x 66.72805 = 834,100.63 which is more than the cost of the MBA

4. If you are given an option to invest at the 10% saving rate with monthly compounding or 10.5% semiannual compounding, which would you chose?

  • I would choose the 10.5% semiannual compounding because the effective interest rate is higher.

the effective interest rate of investing at 10% compounded monthly = (1 + 10%/12)¹² - 1 = 10.47%

the effective interest rate of investing at 10.5% compounded semiannually = (1 + 10.5%/2)² - 1 = 10.77%

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Answer:

Engagement is a sense of purpose, belonging, and commitment to an organization, whereas motivation is the willpower and drive to act on those feelings.

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Explanation:

Internal motivation may lead us to take some action; for many, engagement refers to what we experience during the activity.

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This is the type of exchange rate used by the Chinese government in the question above.

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The federal government offers subsidized loans<span> based on the student’s financial need when applying for aid through the Free Application for Federal Student Aid (FAFSA). The key components of a subsidized student loan (and the biggest benefits) are:

</span><span>1. The U.S. Department of Education pays for any interest accrued while you are in school. To receive this benefit, you must be enrolled at least halftime.
<span>2. You’ll also get a six-month grace period after graduation, meaning that any interest that accrues during your college career and six months afterward, is completely paid for.

</span></span>Unsubsidized student loans<span>, on the other hand, begin accruing interest from the date of your first loan disbursement, though you’re not required to pay that interest until you finish school. When you graduate, the amount of money that accrued during your education is simply added to the principal loan amount and you begin paying off that new amount. One benefit to taking out a federal unsubsidized loan is that you are not required to demonstrate financial need so the amount you can take out is much higher than a subsidized student loan. Additionally, unsubsidized federal student loans are available for both undergraduate and graduate students.
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<span>Federal subsidized and unsubsidized direct federal loans for undergraduates carry the same low, fixed interest rate, so it is generally a good idea to take out a subsidized loan before taking on additional debt with an unsubsidized loan. If you are planning on going back to school, subsidized loans can help save a lot of money in deferment since interest will not accrue.</span>
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