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 6%, would they all have equal, effective annual rates? Explain.

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A: in this we have to calculate financial charges and we have to use given table.

Q: Banks sometimes quote interest rates in the form of “add-on interest.” In this case, if a 1-year…

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Q: A lending institution charges interest at the rate of 3.5% per quarter, a. What is the nominal…

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Q: (a) Suppose a credit card company charges a monthly interest rate of 1.8%. What APR must the company…

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Q: You are given a loan on which interest is charged over a 4-year period, as follows: i. an effective…

A: Let the annual effective interest rate = r 1st year discount rate = 6% 2nd year discount rate = 4%…

Q: What is the amount of compensating balance would be required for a nominal interest rate of 12% to…

A: Nominal interest rate (r) = 12% Effective interest rate (i) = 14.40% Let the compensating balance as…

Q: You are given a loan on which interest is charged over a four-year period, as follows: i) An…

A: The interest rate which is applied on the financial products of the company and would be considered…

Q: Calculate the finance charge (in $), the finance charge per $100 (in $), and the annual percentage…

A: Using excel Rate function

Q: Calculate the finance charge (in $) and the annual percentage rate for the installment loan by using…

A: Finance Charge is the total interest paid during the time period of the project. Finance charge is…

Q: Which one of the following statements about a fixed-rate mortgage (FRM) loan is correct? a. The…

A: Fixed-rate mortgage Loan A fixed-rate mortgage loan is a loan taken for a home or real estate in…

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: Consider a $5,000, 6%, 180-day interest-bearing note and a non-interest- pearing note for the same…

A: Note means an instrument acknowledging as debt due from one party to another party. Interest bearing…

Q: You are considering two loans. The terms of the two loans are equivalent with the exception of the…

A: Assume Loan amount  (Present value)= $10,000 Assume Loan period = 1 year Compounded Semi Annually…

Q: What is the amount of compensating balance would be required for a nominal interest rate of 12% to…

A: Borrowings are the loan which is taken by the individual to meet its financial requirements. The…

Q: Banks sometimes quote interest rates in the form of “add-on interest.” In this case, if a 1-year…

A: Annual percentage rate (APR) refers to the annual cost of funds borrowed. The APR is usually…

Q: find i (the rate per period) and n (the number of periods) for each loan at the given annual rate.…

A: Calculation of Number of periods and monthly interest rate: Answer: Number of periods is 48 monthly…

Q: Investigate the effect of the interest rate on home loans by finding the monthly payment and the…

A: Formulas:

Q: The following loan is a simple interest amortized loan with monthly payments. $5000, 7 1/2%, 4…

A: Answer: Principal balance = $ 5000 rate = 7.5% time = 4 years

Q: monthly

A: I would borrow a loan that is amortized quarterly.   The reason for this is based on the principles…

Q: You have recently seen a credit card advertisement that states that the annual percentage rate is…

A: The effective annual rate can be calculated as per the formula of EAR

Q: If the effective interest rate is 24%, what nominal rate of interest is charged for a continuously…

A: Effective interest rate = 24% e = 2.7182818284590452353602874713527

Q: A loan of $4100 is to be repaid in three equal installments due 110, 197, and 311 days respectively…

A: Loan amount = $4,100 Interest per anum = 6.89% Number of days in year = 365 Let the instalment…

Q: Find the annual simple interest rate of a loan, where $900 is borrowed and where $1008 is repaid at…

A: Simple interest is the type of interest that is calculated on the original amount of the loan and…

Q: Given the annual interest rate and a line of an amortization schedule for that loan, complete the…

A: Payment = $175.92

Q: Savings institutions often state a nominal rate, which can be thought of as a simple annual interest…

A: Effective rate refers to actual return that an investment will generate in a period after…

Q: "If you borrow $9,725 and are required to repay the loan in five equal annual installments of…

A: Using financial calculator

Q: Calculate the finance charge (in $), the finance charge per $100 (in $), and the annual percentage…

A: Finance charge is an extra payment paid on borrowed amount for the period. It is the expense and…

Q: Savings institutions often state a nominal rate, which can be thought of as a simple annual interest…

A: The effective annual interest rate refers to the rate that is actually earned on an investment or…

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: ABC can take a 45-day loan with a 15% interest deducted in advance, to be reapplied each time. How…

A: Introduction: Interest Rate: Any extra amount which is paid against the money borrowed is referred…

Q: Investigate the effect of the interest rate on simple interest amortized auto loans by finding the…

A: Computation of monthly payment and total interest: Excel spreadsheet:

Q: If an interest rate of 8.9% compounded semi-annually is charged on a car loan, what effective rate…

A: Interest is an additional amount which is paid by the borrower to the lender on the borrowed amount…

Q: What is the annual percentage rate on a loan with a stated rate of 2 percent per quarter? A. 2.00…

A: In the given question we require to calculate the annual percentage rate on a loan if the stated…

Q: Someone is borrowing from a five-six ( Bumbay ) money lender. How much will   be charged if you want…

A: Interest is referred to as the monetary charge which is to be paid to the moneylender on the…

Q: asssuming that the interest is the only finance charge, how much interest would be paid on 5,000…

A: The question is based on the concept of Loan and amortization.

Q: Solve the problem. If​ necessary, use the accompanying table of monthly payments. Round your answer…

A: Mortgage Amount (PV) = $105,250Interest rate (rate) = 10%Term of Mortgage = 25 yearsNumber of…

Q: e the table factor, the finance charge, and the monthly payment (in $) for the loan by using the APR…

A: In this we need to determine the present value factor monthly and from that we can find out monthly…

Q: A borrower has the option of accepting a fixed rate loan for five years at 10% or a floating rate…

A: Answer: Decision of the borrower: The decision of the borrower should be based on the following…

Q: ou are offered an add-on loan for $4,500 at 18% for 5 years. What is the monthly payment? What is…

A: Since we answer up-to three sub-parts, we shall answer first three. Please resubmit a new question…

Q: Hagar Company's bank requires a compensating balance of 10% on a $100,000 loan. If the stated…

A: Compensating balance: A compensating balance is a minimum amount of cash that must be maintained by…

Q: To compute for the annual interest payments of a loan, the principal amount is multiplied by: a.…

A: Nominal Rate of a loan is the rate by which interest is paid on the loan. Market Rate and Effective…

Q: Find the APR of the loan given the amount of the loan the number and type of payments, and the add…

A: Annual percentage rate (APR) refers to a real interest rate which an investor is expect from his…