Calculate the effective interest rate for each nominal annual interest rate and compounding frequency shown. Round your answer to 2 decimal places. a. 12% Quarterly compounding b. 7% Semiannual compounding C. 14% Continuous compounding
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- In 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.)Assume you take out a car loan of $8,600 that calls for 48 monthly payments of $300 each. a. What is the APR of the loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Use a financial calculator or Excel.) b. What is the effective annual interest rate on the loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)You have recently seen a credit card advertisement that states that the annual percentage rate is 6.3 percent. If the credit card requires monthly payments, what is the effective annual rate of interest on the loan? (Round answer to 2 decimal places, e.g., 12.25.) Effective annual rate Type your answer here %
- Assume that interest is the only finance charge. Use financial calculator to answer the questions.How much interest would be paid on a $8,000 installment loan to be repaid in 48 monthly installments of $210.72? Round the answer to 4 decimal places. % per monthWhat is the APR on this loan? Round the answer to 2 decimal places. %Use the TVM Calculator to solve the following compound interest problem. Round your result to two decimal places as needed.You invest $15,000in an account. The interest is compounded monthly at an annual rate of 10.6%. The ending account balance will be $81,174.68. How many months was the investment accruing interest?Enter the values you need to put in the TVM calculator. Put the letter xfor the unknown value. Remember that money paid to the bank is negative and money received from the bank is positive.PV= Present ValueN=Number of Compounding PeriodsPMT= Payment I%= Annual Interest Rate as a PercentFV= Future ValueP/Y and C/Y= Payments per Year and/orCompoundings per YearUse the link to the TVM Calculator below to solve the problem. The investment was accruing interest for months.Come and Go Bank offers your firm a discount Interest loan with an interest rate of 10 percent for up to $26 million, and in addition requires you to maintain a 2 percent compensating balance against the face amount borrowed. What is the effective annual interest rate on this lending arrangement? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.32.16.)
- Use an amortization table to solve the problem. Round to the nearest cent. A 7000 debt is to be amortized in 15 equal payments of 504.87 at 1% interest per month on the unpaid balance. What is the unpaid balance after the second payment? Show your table belove include columns for each of the following Loan Balance Payment Interest amount amount principle decrease new balanceA firm sells its accounts receivables to a factor at a 3.5% discount. The average collection period is 3 month. a. What is the effective annual interest rate on this arrangement? (Round your answer to 2 decimal places.) b. What is the implicit effective annual interest rate if the average collection period is 5 months? (Round your answer to 2 decimal places.)Suppose you saw a sign at your local bank that said, "3.3% rate compounded quarterly – 3.7% Annual Percentage Yield (APY)." Is there anything wrong with the sign? Explain. Select the correct choice below and, if necessary, fill in the answer box to complete your choice. A. Yes. The APY is incorrect. The correct APY is ------%. (Round to the nearest hundredth as needed.) B. Yes. The number of compounding periods is incorrect. Interest should be compounded daily. C. No. The information on the sign is correct.
- Use a calculator for this exercise.Chuong Ngo borrows $3000 from a bank that advertises a 7% simple interest rate and repays the loan in five equal monthly payments. Estimate the APR. Round to the nearest tenth of a percent. Use the Approximate Annual Percentage Rate Formula.Ricky Ripov's Pawn Shop charges an interest rate of 15 percent per month on loans to itscustomers. Like all lenders, Ricky must report an APR to consumers.b. What is the effective annual rate? (Do not round intermediate calculations and enteryour answer as a percent rounded to 2 decimal places, e.g., 32.16.)If your credit card calculates interest based on 17.35% APR, compounded quarterly : a) What are your quarterly interest rate and annual effective interest rate? (b) If your current outstanding balance is $3,600 and you skip payments for three quarters, what would be the total balance three quarters from now? Note:-not use excel to solve