E-Loan, an online lending service, recently offered 60-month auto loans at 4.2% compounded monthly to applicants withgood credit ratings. If you have a good credit rating and can afford monthly payments of $382, how much can youborrow from E-Loan? What is the total interest you will pay for this loan?You can borrow $(Round to two decimal places.)COO

Loan: It represents the amount provided by the lender to the borrower as the borrowed amount. The…

Answered: E-Loan, an online lending service,…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 32P

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Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for 15,000 with a nominal interest rate of 11%. However, this is an installment loan, so the bank also charges add-on interest. Mary must make monthly payments on the loan, and the loan is to be repaid in 1 year. What is the effective annual rate on the loan (assuming a 365-day year)?
Del Hawley, owner of Hawleys Hardware, is negotiating with First City Bank for a 1-year loan of 50,000. First City has offered Hawley the alternatives listed here. Calculate the effective annual interest rate for each alternative. Which alternative has the lowest effective annual interest rate? a. A 12% annual rate on a simple interest loan, with no compensating balance required and interest due at the end of the year b. A 9% annual rate on a simple interest loan, with a 20% compensating balance required and interest due at the end of the year c. An 8.75% annual rate on a discounted loan, with a 15% compensating balance d. Interest figured as 8% of the 50,000 amount, payable at the end of the year, but with the loan amount repayable in monthly installments during the year
E-Loan, an online lending service, recently offered 36-month auto loans at 3.9% compounded monthly to applicants with good credit ratings. If you have a good credit rating and can afford monthly payments of $306, how much can you borrow from E-loan? What is the total interest you will pay for this loan? (Round to two decimal places)
E-Loan, an online lending service, recently offered 36-month auto loans at 3.9% compounded monthly to applicants with good credit ratings. If you have a good credit rating and can afford monthly payments of $262, how much can you borrow from E-Loan? What is the total interest you will pay for this loan?
E-Loan, an online lending service, recently offered 48-month auto loans at 4.2% compounded monthly to applicants with good credit ratings. If you have a good credit rating and can afford monthly payments of $587, how much can you borrow from E-Loan? What is the total interest you will pay for this loan?You can borrow? $_____ You will pay a total of $_____ in interest
You currently have two loans outstanding: a car loan and a student loan. The car loan requires that you pay $308 per month, starting next month for 35 more months. Your student loan requires that you pay $132 per month, starting next month for the next 105 months. A debt consolidation company gives you the following offer: It will pay off the balances of your two loans today and then charge you $455 per month for the next 48 months, starting next month. If your investments earn 3.55% APR, compounded monthly, how much would you save or lose by taking the debt consolidation company’s offer? If you lose, state your answer with a negative sign (e.g., -25,126)
For the car loan described, give the following information. A car dealer will sell you a used car for $6,598 with $798 down and payments of $167.51 per month for 48 months. amount to be paid$ ? amount of interest$ ?Interest rate (Round your answer to two decimal places.) % ?APR (rounded to the nearest tenth of a percent) % ?
An online lending company is offering simple interest personal loans based on consumer creditscores. With your credit score, you can borrow $5000 for 3 years at an interest rate of 17.73%. Howmuch money will you pay the lending company at the end of 3 years?
For the car loan described, give the following information. A car dealer will sell you a used car for $6,398 with $798 down and payments of $164.51 per month for 48 months. (a) amount to be paid$ (b) amount of interest$ (c) interest rate (Round your answer to two decimal places.) %(d) APR (rounded to the nearest tenth of a percent)
For the car loan described, give the following information. A car dealer will sell you the $30,950 car of your dreams for $6,000 down and payments of $667.06 per month for 60 months. (c) interest rate (Round your answer to two decimal places.) (d) APR (rounded to the nearest tenth of a percent)
Scarlett borrowed $ 1,900 from a local payday lender and signed a debt contract requiring her to pay back $2,600 in three months. What is the quarterly rate? And what is the effective annual rate (EAR) of this loan? 2. You are hoping to start up a new business but require start-up capital. You are looking for a cheap loan to help start the business. You see a sign offering loans with a daily interest rate of 0.062%. What are the EAR and APR?
On excel You plan on purchasing a car for $28,500. The car dealer tells you that if you finance it through them at a nominal interest rate of 6%, they will give you $1500 cash back (so, your actual loan is only for $27,000). You know you can get a full-priced loan at the local credit union at a nominal interest rate of 2.9%. Both loans will have monthly payments and will be 4 yrs in length. a. Compute the month rate for each loan b. Compute the amount of interest you pay for each loan

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