100000+

Students can't be Wrong!

890117

Orders

4.9/5

Ratings

5002

PhD Experts

GET BEST GRADE, ORDER NOW

250 Words

  34 Pages 8673 Words

 Business Management

Referencing Styles : APA

Part  1   You have just joined the staff of Eureka Publishing Company, a current affairs journal, as a business and finance reporter. The business editor has commissioned a series of articles that will span several weeks of the publication and she has asked you to provide advice on the following questions.     1. What difference would it make to the sum repayable after two years (as a single lump sum) if the amount of $5,000 is borrowed at 12% p.a. compounded (a) an ...

View More
expert
Mervyn Temple      5/5

Completed Orders:731

 

Hire Me
expert 

Solutions

1.a) Amount repayable if Interest compounded annually would be 5000*1.12*1.12 or 6,272 dollars. Hence interest payable is 1272 dollars
b) Amount repayable if interest compounded monthly would be 5000*1.1^24 or 6348.68 dollars. Hence interest payable is 1348.68 dollars
2) The interest rate quoted on any borrowing is known as the nominal rate. For the loan in the given scenario it is 12%/ It becomes a handy exercise to be able to directly compare the interest rate for a particular type of loan between time periods to do this the real interest rate is calculated by removing the rate of inflation from the nominal rate.
The nominal interest rate can be shown algebraically as:
n = r + i + (i x r)
where
n = nominal interest rate
r = real interest rate
i = inflation rate.
Rearranging we get r=n-i/1-I
For the above example we get real interest rate as 8.333 if we assume the inflation to be at 4%.
3)Annuity is a series of equal periodic instalments. They might be

Looking for corporate assignment help? Then MyAssignmenthelp.com is your one-stop answer. We render custom-made assistance with corporate as well as with IT assignment. We are available 24*7 to offer operating system, database, MATLAB, web development and lots of other IT subject based assignment help. We work round the clock to ensure 100% students satisfaction with our delivered service and to make sure that students get assistance on urgent basis.

Business Management has been added in your library.