Calculate the Nominal Rate of Interest P

question 50

Multiple Choice

Calculate the nominal rate of interest p.a. compounded semi-annually if $5000.00 accumulates to $7002.64 in 78 months.

• A) 0.8656%
• B) 0.02625%
• C) 2.625%
• D) 0.0525%
• E) 5.25%

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Definitions:

Return on Total Assets

A financial ratio that measures the profitability of a company in relation to its total assets, indicating how efficient management is at using its assets to generate earnings.

Interest Expense

A financial charge for borrowing money or the cost incurred on debt.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenue.

Financial Leverage

A difference between the rate of return on assets and the rate paid to creditors.