A bank is offering to sell 6-month certificates of deposit for $12,000. At the end of 6 months, the bank will pay $13,000 to the certificate owner. Compute the nominal annual interest rate and the effective annual interest rate.
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- A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an annual interest rate of 11%. If 6 months have passed since note establishment, what would be the recorded interest figure at that time? A. $7,150 B. $65,000 C. $14,300 D. $2,383Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expense
- 1. A bank is offering to sell certificates of deposit valued at $ 5,000.00. At the end of 3 years, the bank will pay $5,310.00 to the certificate owner. Based on a three- month interest period: What is the interest rate the bank is paying you each interest period? b) deposit? What are the nominal and effective interest rates on this certificate ofA one year note payable is issued by a bank to ABC company to purchase a photocopy machine valued at $7,000. The amount owing to the bank for the note must be paid back in one year. Hence, this is a short-term note payable. The interest rate charged by the bank is 12%. Interest charged on the note is included in the payment of $10,000 to be paid to the bank at the end of the year. Required: (a) Calculate the present value of the note (PV). (a) (b) Record the journal entry: i. on the day the asset is purchased General Journal POST DATE ACCOUNT TITLE AND EXPLANATION REF DEBIT CREDIT ii. on the day the note payable is paid back to the bank. General Journal POST DATE ACCOUNT TITLE AND EXPLANATION REF. DEBIT CREDIT AND EA certificate of deposit (CD) is an agreement between a bank and a saver in which the bank guarantees an interest rate and the saver commits to leaving his or her deposit in the account for an agreed-upon period of time.First National Bank offers two-year CDs at 9.16% compounded daily, and Citywide Savings offers two-year CDs at 9.17% compounded quarterly. Compute the annual yield for each institution. (Round your answers to two decimal places.) FNB % CS %
- A bank is offering a loan of $20,000 with an interest rate of 9%, payable with monthly payments over a 4-year period. a. Calculate the monthly payment required to repay the loan. b. This bank also charges a loan fee of 4% of the amount of the loan, payable at the time of the closing of the loan (that is, at the time the borrower receives the money). What effective interest rate is the bank charging?A Company borrowed money from a local bank. The note the company signed requires five annual installment payments of $10,000 beginning one year from today. The interest rate on the note is 7%. What amount did the company borrow? tables, Excel, or a financial calculator. Round to nearest whole dollar amount.A certificate of deposit (CD) is an agreement between a bank and a saver in which the bank guarantees an interest rate and the saver commits to leaving his or her deposit in the account for an agreed-upon period of time. National Trust Savings offers five-year CDs at 8.33% compounded daily, and Bank of the Future offers five-year CDs at 8.36% compounded annually. Compute the annual yield for each institution. (Round your answers to two decimal places.) NTS BF %
- Nelson Co. issued a $80,000, 90-day, discounted note to Community Bank. The discount rate is 5%. At maturity, assuming a 360-day year, the borrower will pay how much?The following certificate of deposit (CD) was released from a particular bank. Find the compound amount and the amount of interest earned by the following deposit. $3500 at 8% compounded daily for 9 years. What is the compound amount? (Round to the nearest cent.)The local bank is currently offering a new investment product, where deposits earninterest according to the following scheme:• An interest rate of r is applied on the 15th day of each month.• A bonus interest rate of t is applied on the 30th day of every odd month. (Theseare the months of January, March, May, July, September, and November.)1. Suppose that you want to deposit an amount of P dollars into the account twice:on January 1 and August 1 in 2023. If you want the value of your investment tobe S by April 30, 2024, express P in terms of S, r, and t.(Note that r and t are not APRs.)2. What is the effective annual rate of the above compounding scheme?