Question 1

If an interest rate of 8.9% compounded semiannually is charged on a car loan, what effective rate of interest should be disclosed to the borrower?

Accepted Answer

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Question 2

To have an effective rate of 10%, what must be the corresponding nominal interest rate with:
a. annual compounding?
b. semiannual compounding?
c. quarterly compounding?
d. monthly compounding?

Accepted Answer

The answer of To have an effective rate of 10%,...

Question 3

Calculate the equivalent interest rate (to the nearest 0.01%)

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Question 4

A bank quotes 7.25% compounded monthly on a loan. What is the effective rate of interest charged?

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Question 5

What is the effective interest rate corresponding to a nominal annual rate of:
a. 4% compounded monthly?
b. 8% compounded monthly?
c. 12% compounded monthly?

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Question 6

What is the effective interest rate corresponding to a nominal annual rate of:
a. 7.5% compounded semiannually?
b. 7.5% compounded quarterly?
c. 7.5% compounded monthly?

Accepted Answer

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Question 7

Calculate the equivalent interest rate (to the nearest 0.01%)

Accepted Answer

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Question 8

A department store credit card quotes a rate of 2% per month on any unpaid balance. Calculate the effective rate of interest being charged.

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Question 9

Calculate the equivalent interest rate (to the nearest 0.01%)

Accepted Answer

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Question 10

Calculate the equivalent interest rate (to the nearest 0.01%)

Accepted Answer

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Question 11

For the effective rate to be 7%, what must be the corresponding nominal interest rate with:
a. annual compounding?
b. semiannual compounding?
c. quarterly compounding?
d. monthly compounding?

Accepted Answer

The answer of For the effective rate to be 7%,...

Question 12

Calculate the equivalent interest rate (to the nearest 0.01%)

Accepted Answer

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Question 13

Calculate the equivalent interest rate (to the nearest 0.01%)

Accepted Answer

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Question 14

A furniture company has decided to drop the effective rate on its credit card by 2%. The store currently charges a periodic rate of 1.85% per month. What new periodic rate should the store advertise?

Accepted Answer

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Question 15

Calculate the effective rate of interest if $1,000 grows to $1459.74 in five years with semiannual compounding.

Accepted Answer

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Question 16

Calculate the equivalent interest rate (to the nearest 0.01%)

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Question 17

Enrique wants to borrow $15,000 for a new car. The bank has personal loans at 5.25% compounded monthly, whereas the credit union at his company is offering personal loans at 5.5% compounded annually. Which should Enrique accept?

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Question 18

Calculate the equivalent interest rate (to the nearest 0.01%)

Accepted Answer

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Question 19

A department store currently charges an effective rate of 18% on its credit card. The store wants to add .25% per month to its monthly compounded rate. What new monthly compounded rate will the store charge?

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Question 20

What rate of interest compounded quarterly has an effective rate of 6%?

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Quiz 9: Compound Interest: Further Topics and Applications

If an interest rate of 8.9% compounded semiannually is charged on a car loan, what effective rate of interest should be disclosed to the borrower?

To have an effective rate of 10%, what must be the corresponding nominal interest rate with: a. annual compounding? b. semiannual compounding? c. quarterly compounding? d. monthly compounding?

Calculate the equivalent interest rate (to the nearest 0.01%)

A bank quotes 7.25% compounded monthly on a loan. What is the effective rate of interest charged?

What is the effective interest rate corresponding to a nominal annual rate of: a. 4% compounded monthly? b. 8% compounded monthly? c. 12% compounded monthly?

What is the effective interest rate corresponding to a nominal annual rate of: a. 7.5% compounded semiannually? b. 7.5% compounded quarterly? c. 7.5% compounded monthly?

Calculate the equivalent interest rate (to the nearest 0.01%)

A department store credit card quotes a rate of 2% per month on any unpaid balance. Calculate the effective rate of interest being charged.

Calculate the equivalent interest rate (to the nearest 0.01%)

Calculate the equivalent interest rate (to the nearest 0.01%)

For the effective rate to be 7%, what must be the corresponding nominal interest rate with: a. annual compounding? b. semiannual compounding? c. quarterly compounding? d. monthly compounding?

Calculate the equivalent interest rate (to the nearest 0.01%)

Calculate the equivalent interest rate (to the nearest 0.01%)

A furniture company has decided to drop the effective rate on its credit card by 2%. The store currently charges a periodic rate of 1.85% per month. What new periodic rate should the store advertise?

Calculate the effective rate of interest if $1,000 grows to $1459.74 in five years with semiannual compounding.

Calculate the equivalent interest rate (to the nearest 0.01%)

Enrique wants to borrow $15,000 for a new car. The bank has personal loans at 5.25% compounded monthly, whereas the credit union at his company is offering personal loans at 5.5% compounded annually. Which should Enrique accept?

Calculate the equivalent interest rate (to the nearest 0.01%)

A department store currently charges an effective rate of 18% on its credit card. The store wants to add .25% per month to its monthly compounded rate. What new monthly compounded rate will the store charge?

What rate of interest compounded quarterly has an effective rate of 6%?