Please help with the steps thx:)
2 answers:
Answer:
interest: 945, FV: 6345
FV= 323711.4, Interest: 226211.4
25.21 years
Step-by-step explanation:
question 1:
simple interest formula
PV(1+it)
30 months is equal to 30/12 years or 2.5 (so t= 2.5)
5400(1+.07*2.5)= 6345
This is the future value, to find the interst subtract the present value
6345-5400= 945
2.)
future value of continously compounding interst:
PV(e^(it))
97500*e^(.06*20)= 323711.4
finding the interest is the same as the last one
323711.4-97500=226211.4
3.)
same formula
let x= time in years
i guess we can round this to 25.21
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The correct option is B, II. only.
Given to us,
I. In the effective rate formula, n is equal to one.
Effective interest rate formula,
where,
r is the effective interest rate,
i is the stated interest rate,
n is the number of compounding periods per year.
According to the question the compounding periods per year is not given to us. Also, loans are taken for a longer period of time.
Thus, we can conclude that statement is false.
II. The nominal rate is 7. 918%.
nominal rate = real interest rate + inflation rate,
but as it is not mentioned in the question about the inflation rate. the statement is true to us. Assuming the inflation rate is 0%.
Thus, we can conclude that statement is true.
III. The Federal Funds Rate is static.
This statement is false, as the no information is given about this statement also this can not be concluded through assumption.
Thus, we can conclude that statement is false.
Hence, The correct option is B, II. only.
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