Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

10. Time Value of Money

Time Value of Money Equations

Financial Accounting

10. Time Value of Money

Time Value of Money Equations

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Given a money factor of 0.0027 for a lease, what is the approximate annual interest rate?

6.48%

2.70%

0.27%

4.86%

Previous problemNext problem

Verified step by step guidance

Understand the relationship between the money factor and the annual interest rate. The money factor is a way to express the interest rate in leasing calculations, and it can be converted to an annual interest rate by multiplying it by 2400.

Identify the given money factor in the problem, which is 0.0027.

Use the formula to convert the money factor to an annual interest rate: Annual Interest Rate = Money Factor × 2400.

Substitute the given money factor (0.0027) into the formula: Annual Interest Rate = 0.0027 × 2400.

Perform the multiplication to find the approximate annual interest rate. Compare the result to the provided answer choices to determine the correct one.