A finance company borrows money on which it pays interest at the rate of 14%. If it pays...
Question:
A finance company borrows money on which it pays interest at the rate of 14%.
If it pays interest half-yearly, find the return per half-year on an investment of $1700.
Return on Investment:
The return on a given investment is usually governed by the time horizon of the investment, the stated nominal annual interest rate and the frequency of compounding. Companies may borrow money from banks or they may even issue bonds to retail and institutional investors who in turn receive the returns.
Answer and Explanation: 1
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View this answerThe calculated value of the return per half-year on the given investment is $119.
The half-yearly interest rate is given by:
- = Annual interest rate...
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