What are annual nominal and effective interest rates

Assignment Help Financial Management
Reference no: EM131952934

1. You want to buy a $20,000 vehicle and if you finance it through the bank, the five-year financing comes to $462.12 per month. What are the annual nominal and effective interest rates your bank charges if you know that the bank applies a daily compounding?

2. What annual interest rate would you need to earn if you wanted a $1,000 per month contribution to grow to $76,500 in six years? (Do not round your final answer to 2 decimal places.)

3. The IF for the future value of an annuity is 4.5 at 10% for 4 years. If we wish to accumulate $8,000 by the end of 4 years, how much should the annual payments be?

Reference no: EM131952934

Questions Cloud

What was his annual rate of return on sculpture : What was his annual rate of return on this sculpture?
What is the rate of return on your investment : What is the rate of return on your investment? What is your rate of return if the stock sells for $10.50 per share?
Degree of operating leverage at last year sales level : Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year’s sales level.
How much must be raised through common stock : How much must be raised through common stock to maintain Jersey Corporation's capital structure?
What are annual nominal and effective interest rates : What are the annual nominal and effective interest rates your bank charges if you know that the bank applies a daily compounding?
What are the positives an negatives of business : What are the positives an negatives of an (LLC) business compared to the other three?
Calculate the duration of this bond : Calculate the Duration of this bond.
Technological advancement-benefits to both consumers-banks : What is one technological advancement, Describe the features, along with the benefits to both consumers and banks.
The project total nominal cash flow from assets : What is the project’s total nominal cash flow from assets for each year?

Reviews

Write a Review

Financial Management Questions & Answers

  What managerial insights about profitability per household

What managerial insights about profitability per household can you extract from Exhibit 3?

  What is the difference between swap and derivative

What is the difference between a swap and a derivative?

  What will one share of this common stock be worth

What will one share of this common stock be worth 11 years from now if the applicable discount rate is 8.0 percent?

  What is the amount of payment that the woman will receive

Determine the cash flow to the woman under an interest-only loan, in which Ponzi will pay the annual interest expense each year and pay the principal back.

  What are the four elements of a firms credit policy

What are the two principal reasons for holding cash? Can a firm estimate its target cash balance by summing the cash held to satisfy each of the two reasons? What are the four elements of a firm's credit policy? To what extent can firms set their own..

  Managed funds may be open-end funds or closed-end funds

A managed fund will outperform an index fund only 60% of the time. Managed funds may be open-end funds or closed-end funds. A benchmark of a good fund manager is the ability to increase share value when the economy is good and retain that value when ..

  Use the free cash flow approach to value the firms equity

The MoMi Corporation's cash flow from operations before interest and taxes was $2.8 million in the year just ended, and it expects that this will grow.

  Evaluate the proposed acquisition of a new machine

You have been asked by the president of your company to evaluate the proposed acquisition of a new machine.

  Specific activities organization can engage in to accomplish

Suppose firm XYZ has AR (Accounts Receivable) = 500, Sales = 3000, Inventory = 300, Cost of Goods Sold = 1200, and AP (Accounts Payable) = 100. How much cash does firm XYZ save if it reduces its Days Sales Outstanding by 10 days? What are specific ac..

  The new operating cash flows amount

Holy Night Music sells chorus sheet music. If the operating level changed to 7,000 units, the new operating cash flows amount is $

  The analysis of the chosen type of trace evidence

Describe materials that can be transferred from a person to another person or to an inanimate object during a crime.

  How much capital will they have to hold

According to an article in the Wall Street Journal on the discussions about commercial bank capital requirements.- How does the amount of capital that a bank has to hold affect its profitability?

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