answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
tester [92]
1 year ago
8

You are considering two loans. The terms of the two loans are equivalent with the exception of the interest rates. Loan A offers

a rate of 7.75 percent, compounded daily. Loan B offers a rate of 8 percent, compounded semi-annually. Which loan should you select and why?a. the annual percentage rate is 7.68 percent.b. the annual percentage rate is 7.15 percent.c the effective annual rate is 8.16 percent.d. the effective annual rate is 8.06 percent.
Business
1 answer:
erma4kov [3.2K]1 year ago
5 0

Answer:

You should go for Loan B because its Effective Interest Rate is better than that of Loan A.

c. The effective annual rate is 8.16 percent.

Explanation:

We cannot make decisions based on the Nominal Interest Rates. So, we have to look at the Effective interest rates of each investment option because Effective Interest Rate takes the effect of compounding into account. The formula of Effective Interest Rate is:

                                             r = [ (1 + i / n) ^ n] - 1

where

r = Effective Interest Rate

i = Nominal Interest Rate that is the interest rate states

n = No. of compounding periods.

Effective Interest Rate of Loan A = 8.057%.

Effective Interest Rate of Loan B = 8.16%.

So, it can seen that Loan B generates a better return.

You might be interested in
The game hides the amount of cookies-per-second a new "vendor" (the grandmothers, the cookie farm, the mines, etc.) will grant y
dezoksy [38]
Im not sure what that will be
6 0
1 year ago
Read 2 more answers
Which tasks are done by both historians and detectives? Check all that apply.
Svetllana [295]
<h2>collecting evidence to answer a question</h2><h2>researching past events</h2><h2>studying evidence to solve a problem</h2><h2>finding out where, when, and why an event happened</h2>

Explanation:

determining who is responsible for a crime: History does not much speak or research about crime. Only detectives will do research on crime. This option is invalid.

collecting evidence to answer a question:

Historians collects evidence to prove the past where as detectives collect evidence to prove the crime

researching past events

Past events are researched to find out the history by the historians, and detectives research the past crime

finding out where, when, and why an event happened: Historians finds details to register the history for future use and detectives find out the place, date and reason for crime.

studying evidence to solve a problem

Historians study evidence to prove the history and detective study to prove the crime

4 0
1 year ago
Read 2 more answers
Explain how the boss at the company in the following scenario could have delegated the tasks more appropriately : Samuel and Mar
OverLord2011 [107]

Answer:

Should have had Martha negotiate the logistics of the financial deal then have Samuel come up with the strategy plan

Explanation:

Samuel is quality control so he would know how to come up with a plan to best fit customer and company need assuring that both parties get the most out of the exchange and or business agreement

5 0
1 year ago
Peachtree Company borrows $30,000 from the local bank at 7% interest. The term of the note is five years, and the annual payment
grandymaker [24]

Answer:

B

Explanation:

Here, in this question, we are asked to determine the decrease in notes payable that peachtree should record in the first year.

To determine this, we proceed as follows;

Interest payment for the first year = 30000*7% i.e 2100

Principal amount paid = Total amount paid - Interest amount

= 7317 -2100 i.e 5217

Notes payable should be reduced by 5217

4 0
1 year ago
Read 2 more answers
On January 1, 2007, Nichols Company’s inventory of Item X consisted of 2,000 units that cost $8 each. During 2007 the company pu
timama [110]

Answer: $45,000

Explanation:

Last In First Out (LIFO) is an inventory valuation and management method that works by selling the most recent inventory to come into the business as opposed to the earlier ones.

In the above, the most recent Inventory to come in is the 5,000 units bought at $10 each.

The 4,500 units sold will therefore come from there.

Cost of Goods Sold = Units Sold * Purchase Price

= 4,500 * $10

= $45,000

4 0
1 year ago
Other questions:
  • Darby's company reported net income after taxes of $2,000,000, on sales of $225 million. her boss asked her to calculate the ear
    7·1 answer
  • Absolute v. comparative advantage activity this chart shows how many units of tractors and cotton workers can produce in the uni
    5·1 answer
  • Austrian Airlines was sued by a 51-year-old former director of sales who charged that he was dismissed and replaced by an employ
    10·1 answer
  • The PTA is holding a raffle. The prize is a camera worth $200. Each raffle ticket costs $5. One hundred tickets are sold and a w
    8·2 answers
  • Three years ago, Vincent Chow completed his degree in accounting. The economy was in a depressed state at the time, and Vincent
    10·1 answer
  • Sugar, Inc. sells $529,300 of goods during the year that have a cost of $428,600. Inventory was $30,083 at the beginning of the
    14·2 answers
  • Which of the following statements describe people who have a strong external locus of control? Check all that apply. They are li
    9·1 answer
  • Gleason sells a single product at $14 per unit. The firm's most recent income statement revealed unit sales of 80,000, variable
    14·1 answer
  • Handel Company uses the allowance method for estimating uncollectible accounts.
    15·1 answer
  • Question 7
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!