Question

A bank quotes an APR on its 5-year cd’s of 12 percent. If these returns are...

A bank quotes an APR on its 5-year cd’s of 12 percent. If these returns are compounded BI-MONTHLY (6 times a year), what is the EAR (effective annual rate)?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Please upvote if the answer is helpful.In case of doubt,do comment.Thanks.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What is the effective annual rate if a bank charges you an APR of 7.64 percent...
What is the effective annual rate if a bank charges you an APR of 7.64 percent compounded monthly? A. 7.79 percent B. 7.86 percent C. 7.91 percent D. 7.98 percent E. 8.01 percent
A local finance company quotes an interest rate of 18.3 percent on one-year loans. So, if...
A local finance company quotes an interest rate of 18.3 percent on one-year loans. So, if you borrow $40,000, the interest for the year will be $7,320. Because you must repay a total of $47,320 in one year, the finance company requires you to pay $47,320/12, or $3,943.33 per month over the next 12 months. What rate would legally have to be quoted? (APR) What is the effective annual rate? (EAR)
1.)What is the future value of $1,230 each year for 6 years at a 8 percent...
1.)What is the future value of $1,230 each year for 6 years at a 8 percent rate of interest? $7,970.40 $9,023.19 $10,982.68 $3,605.60 $10,707.68 2.) Bank 1 quotes an annual rate of 10.4 % with monthly compounding. Bank 2 uses semiannual compounding and quotes an annual rate of 10.6 % Requirement 1: Calculate the effective annual interest rate for each bank. (Enter your answers as a percent rounded to 2 decimal places (e.g., 32.16).) EAR Bank 1 % Bank 2...
Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Stated Rate (APR)...
Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Stated Rate (APR) Number of Times Compounded Effective Rate (EAR) % Semiannually 11 % Monthly 11.9 % Weekly 9.6 % Infinite 13.3 %
2. Suppose a credit card charges an annual percentage rate (APR) equal to 15.24% per year....
2. Suppose a credit card charges an annual percentage rate (APR) equal to 15.24% per year. a) What is the periodic monthly rate charged? b) What is the corresponding effective annual rate (EAR)? c) What is the continuously compounded interest corresponding to the EAR calculated in part b?
A local finance company quotes an interest rate of 18.1 percent on one-year loans. So, if...
A local finance company quotes an interest rate of 18.1 percent on one-year loans. So, if you borrow $39,000, the interest for the year will be $7,059. Because you must repay a total of $46,059 in one year, the finance company requires you to pay $46,059/12, or $3,838.25 per month over the next 12 months. What rate would legally have to be quoted? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places,...
8. A given rate is quoted as 12% APR, but has an effective annual rate (EAR)...
8. A given rate is quoted as 12% APR, but has an effective annual rate (EAR) of 12.55%. What is the frequency of compounding during the year? a. Annually b. Semiannually c. Quarterly d. Monthly e. Daily
Assuming all CDs have equal risk, which of the following CD’s investments has the highest effective...
Assuming all CDs have equal risk, which of the following CD’s investments has the highest effective annual return (EAR)? A bank CD that pays 8.78 percent compounded daily A bank CD that pays 9.01 percent compounded monthly A bank CD that pays 9.10 percent compounded quarterly A bank CD that pays 9.17 percent compounded semiannually
The effective annual rate (EAR) for a loan with stated APR of 6% compounded monthly is...
The effective annual rate (EAR) for a loan with stated APR of 6% compounded monthly is closed to: A. 6.72% B. 6.00% C. 6.66% D. 6.17%
Find the APR, or stated rate, in each of the following cases. (Do not round intermediate...
Find the APR, or stated rate, in each of the following cases. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Use 365 days in a year.) Stated Rate (APR) Number of Times Compounded Effective Rate (EAR) % Semiannually 14.50 % % Monthly 10.50 % Weekly 10.50 % Daily 8.50
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT