WebMar 14, 2024 · The effective interest rate is important in figuring out the best loan or determining which investment offers the highest rate of return. In the case of compounding, the EAR is always higher than the stated … WebYour investment advisor informs you that you do not need to pay a fee for his services. Instead, he invests your money for one month and keeps all of the proceeds before investing it for you. If your advisor makes and keeps a 2% return on your investment, what is his EAR if the earnings rate could be extrapolated for one year? Show Work Best …
What Is the Effective Annual Interest Rate (EAR)? - Experian
WebJan 24, 2024 · Your investment advisor informs you that you do not need to pay a service fee for his services rendered. Instead he invests your money for a month and keeps the proceeds before investing it on your behalf. If your advisor makes and keeps a 2% return on your investment, what is his EAR if the earnings rate could be extrapolated … WebDec 1, 2024 · These types of investments typically have a long-term capital gains tax rate of 28%. In addition to the income taxes described above, those with significant income … reading pa candy plant explosion
Effective Annual Rate (EAR) - How to Calculate Effective Interest Rate
WebMar 13, 2024 · In other words, it is the expected compound annual rate of return that will be earned on a project or investment. In the example below, an initial investment of $50 has a 22% IRR. That is equal to earning a 22% compound annual growth rate. When calculating IRR, expected cash flows for a project or investment are given and the NPV equals zero. WebYou'll get a detailed solution from a subject matter expert that helps you learn core concepts. Question: Three months ago, you purchased a stock for $62.51. The stock is currently … WebThe rate of return on the best available alternative investment of equal risk. Opportunity cost rate Everything else equal, the greater the number of compounding periods per year, the greater the effective rate of return that is earned on an investment. true Adam plans to invest $1500 today in a mutual fund. reading pa candy factory fire