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Crazy boy [7]
3 years ago
14

Rahul needs a loan and is speaking to several lending agencies about the interest rates they would charge and the terms they off

er. He particularly likes his local bank because he is being offered a nominal rate of 6%. But the bank is compounding monthly. What is the effective interest rate that Rahul would pay for the loan
Business
1 answer:
seraphim [82]3 years ago
6 0

Answer: 6.17%

Explanation:

When calculating the effective rate of an interest rate being compounded over a number of periods in a year, use the following:

= [ (1 + Nominal rate / Number of periods in a year) ^ Number of periods in a year- 1] * 100%

Number of periods = Compounding is monthly = 12

Effective rate = [ (1 + 6% / 12)¹² - 1 ] * 100%

= 6.17%

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Answer:

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3 years ago
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3 years ago
On January 1, 2021, Nana Company paid $100,000 for 6,200 shares of Papa Company common stock. The ownership in Papa Company is 1
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Answer:

$372,000

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