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4. Calculate the effective annual rate of a loan that charges 1.2% per month. Select one:
A. 15.4%
B. 14.4%
C. 16.4%
D. 15.0%
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- Calculating interest and APR of installment loan. Assuming that interest is the only finance charge, how much interest would be paid on a 5,000 installment loan to be repaid in 36 monthly installments of 166.10? What is the APR on this loan?Define each of the following loan terms, and explain how they are related to one another: the prime rate, the rate on commercial paper, the simple interest rate on a bank loan calling for interest to be paid monthly, and the rate on an installment loan based on add-on interest. If the stated rate on each of these loans was 5%, would they all have equal, effective annual rates? Explain.Define each of the following loan terms, and explain how they are related to one another: the prime rate, the rate on commercial paper, the simple interest rate on a bank loan calling for interest to be paid monthly, and the rate on an installment loan based on add-on interest. If the stated rate on each of these loans was 4%, would they all have equal, effective annual rates? Explain.
- Gifts Galore Inc. borrowed 1.5 million from National City Bank. The loan was made at a simple annual interest rate of 9% a year for 3 months. A 20% compensating balance requirement raised the effective interest rate. a. The nominal annual rate on the loan was 11.25%. What is the true effective rate? b. What would be the effective cost of the loan if the note required discount interest? c. What would be the nominal annual interest rate on the loan if the bank did not require a compensating balance but required repayment in three equal monthly installments?Calculate the simple interest due on a 72-day loan of P3,000 if the annual interest rate is 4%.Bank ZLY is charging customers a loan rate of 9.2% APR compounded monthly. What is the equivalent effective annual rate (EAR)? A) 9.31% B) 9.42% C) 9.60% D) 9.71%
- Find the i (the rate per period) and n (the number of periods) for the following loan at the given annual rate. Monthly payments of $304.05 are made for 3 years to repay a loan at 10.25% compounded monthly i = n=Determine the present value of a 4 month, 13 1/2 simple interest loan. if its final amount is 31,350In a discount interest loan, you pay the interest payment up front. For example, if a 1-year loan is stated as $42,000 and the interest rate is 8.50%, the borrower “pays” 0.0850 × $42,000 = $3,570 immediately, thereby receiving net funds of $38,430 and repaying $42,000 in a year. a. What is the effective interest rate on this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. What is the effective annual rate on a 1-year loan with an interest rate quoted on a discount basis of 18.50%? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
