royrock89001 royrock89001
  • 14-01-2020
  • Business
contestada

If the one-year discount factor is 0.8333, what is the discount rate (interest rate) per year?

Respuesta :

andromache andromache
  • 14-01-2020

Answer:

20%

Explanation:

The computation of the discount rate per year is shown below:

As we know that

Discount factor = 1 ÷  (1 + Interest rate)^number of years

0.8333 = 1 ÷ (1 + Interest rate)^1

1 + Interest rate = 1 ÷ 0.8333

Interest rate  = 1.20 - 1

Interest rate = 0.20 or 20%

Hence, the interest rate is 20% by applying the discount factor formula which is shown above

Answer Link

Otras preguntas

What do kids wear to school in Germany?
what was the Harlem Renaissance?
What does OPEC mean and why was it formed?
Which of the following is true of the data set represented by the box plot? a. The data contains at least one outlier. b. The mean and median are most likely th
what are two ways in which philosophes sought to change the world?
several friends each had 2/5 of a bag of peanuts left over from the baseball game.they realized that they could have bought two fewer bags between them. How man
2. A biologist measures the speed of a swimming amoeba. The amoeba covers a distance of 17.36 microns in 30 seconds. The biologist wished to compare the speed o
What was the most significant result of the Opium Wars?
strong language often means what
The First Continental Congress that met in 1774 created the Continental Association. What was this Association? a group of men who organized demonstrations agai