The periodic rate and the effective annual rate related

Assignment Help Financial Management
Reference no: EM131571971

How are the simple rate, the periodic rate, and the effective annual rate related? Please give examples for proper uses of each rate. (i.e. an example that one has to use the simple rate, another example that the periodic rate is the correct rate, then a final example that effective annual rate should be used.) Can you think of a situation where all three of these rates will be the same?

Reference no: EM131571971

Questions Cloud

The same investment value on the property : if they have the same opportunity cost of capital, would they generally place the same investment value on the property?
What laws are in place to protect individuals : What laws are in place to protect individuals from age discrimination related to employment. List at least five advantages and disadvantages (each) of hiring
Devise a health promotion plan for a specified population : Devise a health promotion plan for a specified population at risk for chronic diseases such as asthma, heart disease, cancer, or target adolescent smoking.
Prepare an income statement for the year ended december : Using the information given in Question (4) above, Compute the cost of goods sold. Prepare an income statement for the year ended 31 December 2015.
The periodic rate and the effective annual rate related : How are the simple rate, the periodic rate, and the effective annual rate related?
Write advantages and disadvantages of each scenario : How important do you think careers are in shaping our identity. What would be the advantages and disadvantages of each scenario
What is the accrual accounting rate of return : NSC is considering purchasing a new computer network for $72,000. It will require additional working capital of 8,000. What is accrual accounting rate of return
Shack diesel using the constant growth model : If we value Shack Diesel using the constant growth model, what dividend growth rate would justify these assumptions?
What are the best-case and worst-case npvs : McGilla Golf has decided to sell a new line of golf clubs. What are the best-case and worst-case NPVs?

Reviews

Write a Review

Financial Management Questions & Answers

  How much would it be willing to lend the business owner

A small business owner visits his bank to ask for a loan. The owner states that he can repay a loan at $2,400 per month for the next three years and then $1,400 per month for two years after that. If the bank is charging customers 10.75 percent APR, ..

  Expected yield to maturity on the investment

What is your expected yield to maturity (or effective annualized interest rate) on the investment?

  Use as initial investment in fixed assets

What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?

  How would you use this knowledge as a global leader

Discuss (worldwide), which countries were the largest recipient and source countries of FDI last year? Why? How would you use this knowledge as a global leader?

  What is the company break-even point

A company has a cost of goods of 60% of the selling price of its products. It has $200,000 in fixed overhead for administrative expenses, rent and salaries. In addition, it spends 18% of every sales dollar on marketing. What is the company’s break-ev..

  What is the expected stock price one year

What is the expected stock price one year from now just after next year's dividend is paid? (may ask for price today).

  Discuss overall significance of inventory turnover

Use the Internet to locate Wal-Mart Corporation's annual report, and review the financial statements. - Discuss the overall significance of inventory turnover to a retail store.

  What should be duration in order for loan to be approved

A bank is planning to make a loan of $5,000,000 to a firm in the steel industry. It expects to charge a servicing fee of 50 basis points. The loan has a maturity of 8 years with a duration of 7.5 years. The cost of funds (the RAROC benchmark) for the..

  How much was the original deposit

You opened a savings account at a bank and made an initial deposit. The account pays 8% interest compounded annually. You made no additional deposits and in exactly one year you close the account and take out off of the money. The balance at the time..

  What is the present value of the future earnings

Newson Corp is predicting net income of $50,000 this year and expects this amount to increase by $4,000 every year into the future. If the 30-year government bonds are paying 6.5% and there are 100,000 shares outstanding, what is the present value of..

  Continuously compounded lump sum investment

You have your choice of 3 investments. Investment A is a 15-year annuity that features end of month $1500 payments and has an interest rate of 5.5% compounded monthly. Investment B is a 5 percent continuously compounded lump sum investment also for 1..

  Annual and the monthly effective interest rates

The final purchase price is $400,000 and, if you need a mortgage from the bank, your down payment will have to be 20% of the purchase price. The mortgage is a 30-year fixed rate loan with an Annual Percentage Rate (APR) of 4.20%. Compute both the ann..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd