Calculating effective and nominal interest rates
Not what you're looking for?
1. What is the effective interest rate if nominal annual interest is 14.8% computed monthly?
2. What is the effective interest rate if nominal annual interest is 12.68% computed continuously?
3. What is the effective interest rate if nominal annual interest is 10.68% computed every 2 months?
4. What nominal annual interest is equivalent to an annual effective interest of 15.5% when computed continuously?
Purchase this Solution
Solution Summary
Solution depicts the steps to calculate the effective/nominal interest rate for the given cases. Calculations are carried out with the help of suitable formulas.
Solution Preview
1. What is the effective interest rate if nominal annual interest is 14.8% computed monthly?
Number of compounding=m=12
Nominal rate of interest=r=14.8%
Effective rate of ...
Education
- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
Recent Feedback
- "Thank you"
- "Really great step by step solution"
- "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
- "Thanks Again! This is totally a great service!"
- "Thank you so much for your help!"
Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.