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3 years ago

How does savingd intrest work?

Business

1 answer:

Vinvika [58]3 years ago

8 0

Answer:

The interest rate determines how much money a bank pays you to keep your funds on deposit. If the account has a 1.00% interest rate and the interest compounds annually—that is, the bank pays you interest on your balance once each year—you'll earn $50 after the first year.

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• Now imagine that you bought a mutual fund that had a beginning NAV of $10 per share. It paid dividends of $0.50 and distribute

sp2606 [1]

Answer:

The total return in % terms is 7.5% while it is $0.75 in dollar terms

Explanation:

Total return =NAV1-NAV0+Dividends+Capital gains/NAV0

NAV1 is the closing NAV at $9.50

NAV0 is the opening NAV at $10

Dividends is $0.50

capital gains is $0.75

Total return=($9.50-$10.00+$0.50+$0.75)/$10.00

Total return is 7.50%

Total return in dollar terms =($9.50-$10.00+$0.50+$0.75)

=$0.75

The total return in % terms is 7.5% while it is $0.75 in dollar terms

The return is made of increase or decrease of NAV itself plus dividends and capital gains in share price.

3 0

4 years ago

Read 2 more answers

As a financial analyst, you are tasked with evaluating a capital-budgeting project. You were instructed to use the IRR method, a

Vilka [71]

Answer: 9.25%

Explanation:

The Capital Asset Pricing Model (CAPM) can be used to find the expected return of a project which is another term for the hurdle rate. This can then be used in the IRR method.

Formula is;

Hurdle Rate = Risk free rate + Beta( Market rate of return - risk free rate)

Hurdle Rate = 4% + 0.75( 11% - 4%)

Hurdle Rate = 4% + 5.25%

Hurdle Rate = 9.25%

7 0

3 years ago

Which of the following is NOT included in the calculation of GDP?

viktelen [127]

Answer:

The correct answer is option C.your granny's monthly social security payment

Explanation:

Judging from the formula used in computing the GDP,option A relates to household consumption as the new textbook is not for resale.

Option B also points to household consumption expenditure,as the cup of coffee is for household usage.

Option C does not have a place in the formula as it is not a payment for a good or service.It is a payment that cannot be tied to any transaction.Hence,option C is your best bet.

Paying wages means parting with money in return for value-adding services,so it features in the GDP computation.

7 0

3 years ago

Cost of debt with fees. Kenny Enterprises will issue a bond with a par value of $1,000, a maturity of twenty years, and a coup

Salsk061 [2.6K]

Answer:

Kenny Enterprises

Cost of Debt with fees:

Market Prices $982.48 $1,004.93 $1,068.15 $1,171.91

Cost of debt (b- a) $48.59 $26.14 ($37.08) ($140.84)

Cost of debt in percentage 4.86% 2.61% -3.71% -14.08%

Explanation:

a) Data and Calculations:

Market Prices $982.48 $1,004.93 $1,068.15 $1,171.91

Investment bank charges 25.00 25.00 25.00 25.00

a) Net bonds proceeds $957.48 $979.93 $1,043.15 $1,146.91

b) Repayments:

PV of interest payments $770.66 $770.66 $770.66 $770.66

PV of principal ($1,000) 235.41 235.41 235.41 235.41

Total repayments $1,006.07 $1,006.07 $1,006.07 $1,006.07

Cost of debt (b- a) $48.59 $26.14 ($37.08) ($140.84)

Cost of debt in percentage 4.86% 2.61% -3.71% -14.08%

Present values of interest payments:

N (# of periods) 40

I/Y (Interest per year) 7.5

PMT (Periodic Payment) 37.5

FV (Future Value) 0

Results

PV = $770.66

Sum of all periodic payments $1,500.00

Total Interest $729.34

Present value of principal repayment:

N (# of periods) 20

I/Y (Interest per year) 7.5

PMT (Periodic Payment) 0

FV (Future Value) 1000

Results

PV = $235.41

Total Interest $764.5

6 0

3 years ago

If plant assets of a manufacturing company are sold at a gain of $1,000,000 less related taxes of $350,000, and the gain is not

alekssr [168]

Answer:

D. a gain of $1,000,000 and an increase in income tax expense of $350,000.

Explanation:

Given that

The gain is $1,000,000

And, the taxes is $350,000

So here the income statement that disclose the impact is that

There is a gain of $1,000,000 and also at the same time the income tax expense is rise by $350,000

Therefore the option d is correct

hence, the same would be considered

5 0

3 years ago

How does savingd intrest work?​

How does savingd intrest work?