BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
$1, 025.00
|
|
|
$1, 050.95
|
|
|
$$1, 051.95
|
|
|
$1, 150.95
|
Detailed explanation-1: -Answer and Explanation: The calculated value of the investment in 1 year is $1, 050.94 .
Detailed explanation-2: -For example, 5% interest with quarterly compounding has an effective annual yield of (1 + . 05/4)^4-1 = . 0509 or 5.09%.
Detailed explanation-3: -Answer: $1, 000 invested today at 6% interest would be worth $1, 060 one year from now. Let us solve this step by step.
Detailed explanation-4: -Therefore, the amount received annually through compound interest on Principal = 1000, Rate = 5% and Time = 3 years is Rs. 1, 157.625.
Detailed explanation-5: -Example: Consider a one-year loan with a 5 percent APR compounding quarterly. Effective annual interest rate = (1 + (APR / number of compounding periods)) ^ (number of compounding periods)-1. (1+(0.05/4))^(4)-1.