Answer:
interest rate r = 6.78 %
Explanation:
given data
investment = $12,000
interest rate = 3.5 percent = 0.035
time = 5 year
interest rate = 7.9 percent = 0.079
time = next 15 year
to find out
What was your annual rate of return over the entire 20 years
solution
we get here interest rate as
interest rate r = ![[(1+r)^{t1} * (1+r)^{t2}]^{\frac{1}{t1+t2}} - 1](https://tex.z-dn.net/?f=%5B%281%2Br%29%5E%7Bt1%7D%20%2A%20%281%2Br%29%5E%7Bt2%7D%5D%5E%7B%5Cfrac%7B1%7D%7Bt1%2Bt2%7D%7D%20-%201)
...................1
here t1 is time period for first 5 year and t2 is time i.e next 15 year and r1 and r2 is rate
now put here value we get
interest rate r = ![[(1+)^{t1} * (1+r)^{t2}]^{\frac{1}{t1+t2}} - 1](https://tex.z-dn.net/?f=%5B%281%2B%29%5E%7Bt1%7D%20%2A%20%281%2Br%29%5E%7Bt2%7D%5D%5E%7B%5Cfrac%7B1%7D%7Bt1%2Bt2%7D%7D%20-%201)
interest rate r = ![[(1+0.035)^{5} * (1+0.079)^{15}]^{\frac{1}{5+15}} - 1](https://tex.z-dn.net/?f=%5B%281%2B0.035%29%5E%7B5%7D%20%2A%20%281%2B0.079%29%5E%7B15%7D%5D%5E%7B%5Cfrac%7B1%7D%7B5%2B15%7D%7D%20-%201)
interest rate r = 1.0678 - 1
interest rate r = 0.0678
interest rate r = 6.78 %
The free cash flow can be calculated as below:
Revenue 12000000
Less: Expense (8000000)
Less: Depreciation (1500000)
Earnings Before Tax 2500000
Less Tax (750000)
Earnings after tax 1750000
Add Depreciation 1500000
Total Cash Earnings 3250000
Less: Change in Working Capital (500000)
Less : Purchase of Asset (700000)
Free Cash Flow 2050000
Thus Free Cash Flow can be calculated as above.
Answer: 7.12%
Explanation:
Effective Annual Interest rate is the nominal interest rate adjusted for the number of compounding periods a financial product will experience in a period of time.
To calculate the Effective Annual Rate one can use the following formula,
Effective Rate of Interest = (1+r/m)^m - 1
where r is the rate and
M is the no of compounding periods per year which in this case would be 2 because the payments are semi annual
Plugging in figures would give us,
Effective Rate of Interest = (1+0.07/2)^2 - 1
=0.0712
= 7.12%
If you need any clarification do comment or react.
Answer:
demographic and psychographic segmentation
Explanation:
Tiara's target market is based on age (demographic) and interests (psychographic)
