Determine the effective semi-annual interest rate

Assignment Help Financial Management

Reference no: EM131998206

You are borrowing money that must paid back after 6 months. You are given the following loan options:

(a) 12% per year

(b) 11% per year, compounded daily

(d) 11.5% per year, compounded monthly

Determine the effective semi-annual interest rate. Which loan option do you prefer?

You decide its time to start saving for your retirement by making equal bi-weekly deposits into an account that earns 8% year, compounded daily. How long will it take for you to have 100 times the amount of the initial deposit in your account?

The Autocar E3 refuse truck has an energy recovery system that is expected to reduce fuel consumption by 30%. The fuel cost for a regular refuse truck (without the energy recovery system) is $500 per month. How much can a private waste-hauling company afford to spend now on the recovery system, if it wants to recover its investment in 5 years plus a return of 12% per year, compounded quarterly.

(a) Assume no inter-period interest

(b) Repeat with inter-period interest collected

A company is planning a plant expansion that is expected to cost $10 million. How much must the company set aside now in a lumps-sum investment to have the money in 2 years? Capital funds earn interest at a rate of 12% per year, compounded continuously.

Reference no: EM131998206

Questions Cloud

What is the best estimate of the stock price per share : The company has 10 million shares of stock outstanding. What is the best estimate of the stock's price per share?

Create a cost benefit analysis matrix for the hris vendor : Create a cost benefit analysis matrix for the HRIS vendor you have chosen. Analyze the cost justification strategies that you will use to justify the cost.

What will be your percentage ownership of the firm after IPO : If all of the shares sold are from your? holdings, how much will the firm? raise? What will be your percentage ownership of the firm after the? IPO?

What weight should you use for debt in the computation : What weight should you use for debt in the computation of OMG’s WACC?

Determine the effective semi-annual interest rate : Determine the effective semi-annual interest rate. Which loan option do you prefer?

Describe the management and leadership qualities : Described the management and leadership qualities you have acquired in this course and throughout the MSML program that are making you more marketable.

Saving for your retirement by making equal biweekly deposits : You decide it's time you start saving for your retirement by making equal biweekly deposits into an account that earns 8% per year compounded daily.

Discuss the key elements of the writing process : In this presentation, focus on key elements of the writing process, as advocated by Evan Thomas, and connect these elements with examples from your Applied.

Planning fund raising event for the spring semester : The Bentley Student Association (BSA) is planning a fund raising event for the spring semester.

User Account

All Pages