- This topic has 5 replies, 2 voices, and was last updated 3 years ago by John Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
Viewing 6 posts - 1 through 6 (of 6 total)
- You must be logged in to reply to this topic.
Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › interest
hi
if nominal interest is compounded weekly as 2% what is apr ?
r = 2/52 weeks =0.038 %
1 + R = (1 +.00038 )^52
R = 1. 99%
is this right ??
No it is not right.
2/52 = 0.038 (not 0.038%)
Therefore 1 + R = (1 + 0.038)^52
but 2 is in % right ?
so when we divide it is .02/52
What is the effective annual rate of interest of 2.1% that is compounded every 3 months?
Also in this question then it must be
r = 2.1/4 =.525
1+R = 1.525^ 4
R= 4.408
but answer says 8.67
2% is the same as 0.02, not 0.02%.
What I wrote before is correct.
Do watch my free lectures on interest 🙂
i did sir. i cant seem to understand the nominal to effective rate
nominal rate is when interest rate is expressed annually but calculated less than a year right
What is the effective annual rate of interest of 2.1% that is compounded every 3 months?
Also in this question then it must be
r = 2.1/4 =.525
1+R = 1.525^ 4
R= 4.408
but answer says 8.67
If the interest is 2.1% charged every three months, then 1 + R = 1.021^4
Again, have you watched my free lectures on interest?