Compound interest with nonannual periods) After examining the various personal loan rates available to you, you find that you can borrow funds from a finance company at an APR of 6 percent compounded quarterly or from a bank at an APR of 7 percent compounded monthly. Which alternative is more attractive?
Q: 2. A bank offers a 272 - day discounted loan at a simple discount rate of 12%. (a) How much money…
A: Solution Concept Simple interest rate is the rate that does not have the effect of compounding To…
Q: a. What is your effective annual interest rate (an opportunity cost) on the revolving credit…
A: Interest rate is the percentage rate being charged upon the par value of the money issued or funded.…
Q: You want to buy a $170000 home. You plan to pay $34000 as a down payment, and take out a 20 year…
A: Price of Home =$ 170000 Down Payment =$ 34000 Amount Financed = $ 170000-$ 34000 = 136000 Years = 20…
Q: An individual wishes to borrow $10,000 for a year and is offered the following alternatives: a. A 10…
A: Calculating the effective interest rate on borrowing option 10% loan discounted in advances. We…
Q: What is the effective interest rate charged to a loan of P5,000 paid after 5 years amounting to…
A: Effective Rate of Interest is the percentage return on the amount invested into any return paying…
Q: Banks sometimes quote interest rates in the form of “add-on interest.” In this case, if a 1-year…
A: Loan Amount borrowed= $1,000 Monthly payment = $108 Time period = 12 months
Q: Banks sometimes quote interest rates in the form of “add-on interest.” In this case, if a 1-year…
A: Annual percentage rate is the interest rate paid in a year on loan amount or on investment. It is…
Q: A loan is offered with monthly payments and a 8.50 percent APR. What's the loan's effective annual…
A: Effective annual rate is the rate that is actually earned. It can be calculated Effective annual…
Q: How much is the interest if you need to borrow 400,000 for one year with 475,000 line credit, where…
A: Interest = amount borrowed * rate of interest
Q: You borrow $235,000; the annual loan payments are $31,351.50 for 30 years. What interest rate are…
A: Given information: Loan amount borrowed is $235,000 Annual loan payment is $31,351.50 Number of…
Q: s out a loan with monthly payments of €500 for a period of four years with first payment made today.…
A: The given problem can be solved using PV function in excel. PV function computes loan amount for…
Q: NAB offers a car loan that will require you to pay 8% per annum, compounded weekly. Which of the…
A: Effective annual rate is the equivalent rate in comparison with the interest rate that is compounded…
Q: Do you want to By A home for $330,000. You plan to pay 33,000 as a down payment and take out a 15…
A: Loan amount is the amount that is borrowed from a financial institution after paying a certain…
Q: A lender requires PMI that is 0.8% of the loan amount of $490,000. How much (in dollars) will this…
A: A loan's PMI or Private mortgage insurance is a kind of mortgage insurance that is used by lenders…
Q: (Compound interest with nonannual periods) After examining the various personal loan rates available…
A: Payoff of the loan is calculated using the future value formula. Future value formula is as…
Q: A lender requires PMI that is 0.8% of the loan amount of $460,000. How much (in dollars) will this…
A: Given information: Loan amount is $460,000 PMI requires 0.8% of loan amount
Q: You borrow $90,000; the annual loan payments are $12,852.25 for 30 years. What interest rate are you…
A: Interest : It is the total amount payment on loan taken or fund borrowed by any person . it may be…
Q: Come and Go Bank offers your firm a discount Interest loan with an interest rate of 10 percent for…
A: Effective annual interest rate(ear) is the actual rate of return that is earned/ paid on loan…
Q: The most expensive method of calculating the dollar cost of the interest on this installment loan…
A: Informantion provided: Borrowing amount = $1000 Interest rate = 10% Definitions: Simple interest…
Q: Assuming that the interest is the only finance charge, how much interest would be paid on a 5,000…
A: Interest is the amount paid on a loan by the borrower to the lender above the principal amount to…
Q: Suppose you have a Visa credit card and pay a 20 percent annual fina charge (1.67 percent per month)…
A: The credit card charges interest on average daily balance and finance charges on based on month on…
Q: Wants to loan from a certain bank. He asks you for a piece of advice for him to save from the loan.…
A: To analyse the given options, we shall compare the effective interest rate which can be calculated…
Q: A lender requires PMI that is 0.8% of the loan amount of $470,000. How much (in dollars) will this…
A: Working note:
Q: Chuong Ngo borrows $3200 from a bank that advertises a 8% simple interest rate and repays the loan…
A: Given: Borrowed amount = $3,200 Simple interest = 8% Monthly payments =4
Q: Your firm is considering a one-year loan for $522,000. The fees are 2% of the loan amount and the…
A: The lender deducts the fees upfront while disbursing the money, so effectivly the borrower get the…
Q: You've worked out a line of credit arrangement that allows you to borrow up to GHC 50 million at any…
A: Interest rate monthly =0.5% He has to put 5% of loan on Non interest bearing.
Q: pital Corporation (CCC) is taking out a new 2-year bank loan for $100,000 at 6% interest (APR…
A: The given problem can be solved using EFFECT function in excel. EFFECT function computes effective…
Q: Which bank would you prefer to borrow from?
A: Information Provided: Bank Z interest rate = 5% compounded monthly Bank Y interest rate = 4.75%…
Q: onsider a loan at 4.125% APR on 6 years for a $23,000 car a. Estimate the monthly payment (using…
A: Equated Monthly Installments are one part of the equally divided monthly outgoes to clear off an…
Q: What would be r in this problem? A P100,000 loan is to be paid monthly for 2 years with an interest…
A: Effective Annual Rate: The effective annual rate of interest is the actual or the real rate of…
Q: You want to buy a $280000 home. You plan to pay $56000 as a down payment, and take out a 15 year…
A: Dear student we need to use excel to solve this problem. The formulas that you need to understand to…
Q: Someone buys a car for 12,000$ and puts 25% down. They then get a simple interest amortized loan for…
A: APR: Annual percentage rate includes fees and additional costs related to the loan processing. It is…
Q: ased on effective interest rate, in which bank would you prefer to borrow fund and justify your…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Assume you take out a car loan of $8,600 that calls for 48 monthly payments of $300 each. a.…
A: Annual Percentage Rate(APR) is the specified rate of interest charged by any of the authorizing…
Q: A customer of your bank comes for a car loan 10000 OMR. He is charged with an interest rate of 5%…
A: Formulas:
Q: You plan to borrow P10,000 from your bank, which offers to lend you the money at a 7.5% nominal rate…
A: Borrowed amount is P10,000 Nominal interest rate is 7.5% To Find: Effective interest rate on a…
Q: effective interest rate
A: Formula: effective interest rate= [1+ interest rate/period)^ period]-1 *100
Q: You have just borrowed $120,000 to buy a condo. You will repay the loan in equal monthly payments of…
A: a. Calculate the monthly interest rate as follows: Monthly interest rate is 1.25%
Q: You are quote for a loan as 14.5% per year, compounded monthly. What is the effective yearly…
A: Compounding interest means calculating interest not only on the principal but also on the interest…
Q: FINCORP has two debtors who each make a $10, 000 purchase. Debtor 1 pays their account in 10 days,…
A: For the purpose of increase the sales of the company, a scheme launched by the companies of credit…
Q: ABC is inclined to take a bank loan that has a face amount of P5,000,000, a term of 6 months,…
A: Generally, The loan is paid out off several Installments. Based on the credit history of borrower,…
Q: Suppose that you borrow $10,000 for four years at 8% toward the purchase of a car. Use PMT to find…
A: given, p = 10000 n = 12 r =8% t= 4 pmt=p×rn1-1+rn-nt=10000×8%121-1+8%12-12×4=$244.14 MONTHLY PAYMENT…
Q: A man loans $4,000 at one interest rate and $5,000 at a 1% greater rate. The $5,000 loan earns $110…
A: Let the interest rate for $4000 = r Interest rate for $5000 = r + 0.01
Q: A lender requires PMI that is 0.7% of the loan amount of $490,000. How much (in dollars) will this…
A: Working note:
Q: If you borrow $1,000 at 8.5% simple interest and the loan requires a lump sum payment of $1,213.16,…
A: Interest on Loan = $1,213.16 - $1,000 Interest on Loan =$ 213.16
Q: You want to buy a $280000 home. You plan to pay $56000 as a down payment, and take out a 15 year…
A: A mortgage is the type of loan that a person is required to buy a house. It is the loan in which a…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Your firm is considering a one-year loan for $522,000. The fees are 2% of the loan amount and the interest rate is 4.3%. First, compute the net amount of funds from the loan. Based on this net amount, what is the true interest rate of the loan? Group of answer choicesAfter examining the various personal loan rates available to you, you find that you can borrow funds from a finance company at 8 percent compounded or from a bank at 9 percent compounded . Which alternative is more attractive?Your firm is considering a one-year loan for $522,000. The fees are 2% of the loan amount and the interest rate is 4.3%. First, compute the net amount of funds from the loan. Based on this net amount, what is the true interest rate of the loan?
- (Calculating an EAR) After examining the various personal loan rates available to you, you find that you can borrow funds from a finance company at 12 percent compounded quarterly or from a bank at 13 percent compounded daily. Which alternative is more attractive? If you can borrow funds from a finance company at 12 percent compounded quarterly, the EAR for the loan is entered in your response here -----%. (Round to two decimal places.) If you can borrow funds from a finance company at 13 percent compounded daily, the EAR for the loan is entered in your response here ------%. (Round to two decimal places.) Show excel formula/computation and manualYou are taking out a single-payment loan that uses the simple interest method to compute the finance charge. You need to figure out what your payment will be when the loan comes due. The equation to calculate the finance charge is: FsFs = Amount of Loanx Interest Ratex Term of Loan where FsFs is the finance charge for the loan, and the term of the loan is in . You’re borrowing $10,000 for two years with a stated annual interest rate of 6%.Using the average interest rate for a federal loan of 2.75% AND the average interest rate for a private loan of 5.8%, calculate how long it'll take you to pay off both federal and private loan using the total cost from part 2. What would your monthly loan payments be (have realistic monthly loan payments as you would have other expenses)?
- After examining the various personal loan rates available to you, you find that you can borrow funds from a finance company at 9% compounded weekly or from a bank at 10% compounded monthly. Which alternative is more attractive? If you can borrow funds from a finance company at 9% compounded weekly, the EAR for the loan is %You want to buy a $190000 home. You plan to pay $19000 as a down payment, and take out a 15 year loan at 4.25% interest for the rest.a) What is the amount of the payment?$b) If the bank charges 2 points on the loan, what is the amount charged for points?$c) If the bank charges 2 points on the loan, what is the true interest rate?$ TVM SOLVER1) What is the loanable funds market? 2) Calculate the following: You save $100 and want to see how much you will earn based on the following interest rates Interest Rate Value after 1 month -1% ? 0.5% ? 1% ? 2% ? 3) What supply factors affect the Loanable Funds market? 4) What demand factors affect the Loanable Funds market?
- 1.You are the loan department supervisor for a bank. This installment loan is being paid off early, and it is your task to calculate the rebate fraction, the finance charge rebate (in $), and the payoff for the loan (in $). (Round dollars to the nearest cent.) AmountFinanced Number ofPayments MonthlyPayment PaymentsMade RebateFraction FinanceChargeRebate LoanPayoff $4,700 36 $168.33 31 ____ $ ____ $ ___ 2.Calculate the table factor, the finance charge, and the monthly payment (in $) for the loan by using the APR table, Table 13-1. (Round your answers to the nearest cent.) AmountFinanced Number ofPayments APR TableFactor FinanceCharge MonthlyPayment $9,400 36 13% $ ___ $ ___ $ ___Find the following. (Round your answers to the nearest cent.) FinanceCharge Number ofPayments Frequency Amount Number ofPayments Left $9.10 12 Monthly $15 5 (b) the amount needed to pay off the loanImagine that you were approved for a $5000, 3 year, 12 percent loan with the finance charges figured using the discount method. How much cash will you received from this loan? $1800 $5000 $3350 $1670 $3200