- To calculate the effective rate of a loan, we can use the formula: Effective rate = (1 + (nominal rate / number of compounding periods per year))^(number of compounding periods per year * number of years) – 1
In this case, the nominal rate is 4%, the number of compounding periods per year is 4 (quarterly), and the number of years is 5.
Effective rate = (1 + (0.04 / 4))^(4 * 5) – 1 Effective rate = (1.01)^20 – 1 Effective rate = 4.95%
So, the effective rate of the loan is 4.95%.
- To calculate the net price of an order, we need to use the net decimal equivalent of the trade discount. The net decimal equivalent is the percentage of the list price that remains after the trade discount is applied.
The net decimal equivalent of 11% is 1 – 0.11 = 0.89, the net decimal equivalent of 8% is 1 – 0.08 = 0.92, the net decimal equivalent of 4% is 1- 0.04 = 0.96
So, the net price of the order would be $600 * 0.89 = $534