What Quarterly Compounded Nominal Rate and Effective Rate of Interest

question 14

Short Answer

What quarterly compounded nominal rate and effective rate of interest are being charged on a $5,000 loan if quarterly payments of $302.07 will repay the loan in 5½ years?

---

Definitions:

Percent Of Fixed Assets

A financial ratio that indicates what portion of a company's total assets are made up of fixed assets, such as property, plant, and equipment.

Vertical Analysis

This is a method in financial statement analysis where each line item is listed as a percentage of another item. For income statements, each expense is presented as a percentage of sales, and on the balance sheet, each asset, liability, or equity is presented as a percentage of total assets.

Quick Assets

Cash and other current assets that can be easily converted to cash, such as temporary investments and accounts receivable.

Vertical Analysis

Vertical Analysis is a financial statement analysis tool that presents each item in the financial statement as a percentage of a base figure for the same period, facilitating ratio comparisons.