Answered: Jerome borrows ₱75,000 from the bank…

Jerome borrows ₱75,000 from the bank that advertises a 8% of simple interest rate and repays the loan in six equal monthly payments. Find the finance charge and estimate the annual percentage rate.

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 22PROB

See similar textbooks

Related questions

Q: What are the functions of Financial Market

A: Financial market:- A market in which financial assets can be bought and sold when they facilitate t...

Q: A farmer borrowed a loan at an interest rate of 50% per annun. In 3 years he has not paid anything a...

A: Owed amount (FV) = 675 Interest rate (r) = 50% Period (n) = 3 Years

Q: First City Bank pays 8 percent simple interest on its savings account balances, whereas Second City ...

A: Compound interest is the additional interest earned on the reinvested amount. It is interest on inte...

Q: Cenderawasih Holdings is evaluating two (2) mutually exclusive projects that require an initial inve...

A: Here, Cost of Capital is 16%

Q: An analyst is evaluating securities in a developing nation where the inflation rate is very high. As...

A: Yield is a percentage measure of the return on an investment over a specific period of time. Yield i...

Q: Your parents are planning to save for their retirement. A retirement plan is a financial arrangement...

A: Amount to accumulate = P 5000000 n = 10 years = 120 months Interest rate = 5% quarterly compounded L...

Q: In what way is your home an investment? Long-term equity growth in your home is a component of y...

A: Homeownership has long been a part of everyone's dream. As a result, many people believe that having...

Q: You are an investment advisor. During a consultation a client says to you "I want to diversify my po...

A: The question is based on the concept of portfolio management and diversification of risk. Diversific...

Q: An individual is purchasing a $15,000 automobile, which is to be paid for in 48 monthly installments...

Q: 1. Pharmaly-maly Company has a collection schedule of 60% during the month of sales, 15% the followi...

Q: Who are the three (3) players who interact in the financial markets? Describe each and give examples...

A: By distributing resources and producing liquidity for businesses and entrepreneurs, financial market...

Q: Theta Corporation receives checks from its customers. The total check value averages P700,000 each d...

A: Benefit or cost to be calculated on yearly basis, which means we have now received early and we can ...

Q: Which approach would most likely be used to appraise an apartment building? O Investment Method Sale...

A: Appraisal is very important in the case of property as appraisal will lead to the approval of loans....

Q: using a capitalization of 10% a commercial property is valued at 420000. the expenses are 30% of the...

A: Capitalization rate = 10% Property Value = 420,000 Expenses = 30% of gross income

Q: In early 2019, the following information was true about Abercrombie and Fitch (ANF) and The Gap (GPS...

A: The market to book ratio is a financial valuation ratio that compares the company's market value wit...

Q: National Co. has P5 million in inventory and P2 million in accounts receivable. Its average daily sa...

A: Inventory conversion period = Inventory/Average daily cost of goods sold Note :- In case cost of g...

Q: What is risk aversion, and how is risk aversion related to the expected return on a stock

A: In the world of investment, the risk appetite of the investor is an important consideration when det...

Q: 5. A bond with a par value of P 100,000 and with a bond rate of 10% payable annually is sold now for...

Q: First bank offers you a car loan at an annual interest rate of 10% compounded monthly. What effectiv...

Q: Q6. Suppose you deposit $290,000 into an account that pays 5% interest compounded annually. If you w...

A: Annuity refers to the payment series of same nominal value which are paid or received at a same inte...

Q: what is the value of the bond.

A: Bond: It is a debt instrument issued by the firm to raise capital from the investors. The bondholder...

Q: What are the short and long term goals for a finance student hoping to get an internship in consulti...

A: A finance intern usually assists the financial institution with basic tasks while learning about its...

Q: 5.31 2021 7.80 The current interest rate on new debt is 12%; Foust's marginal tax rate is 25%; and i...

A: Cost of Debt: It represents the cost of raising debt capital from the investors. The company pays co...

Q: Suppose that $6,000 is placed in a bank account at the end of each quarter over the next 10 years. W...

A: Quarterly payment (Q) = $6000 n = 10 years = 40 quarters Interest rate = 13%

Q: ABC has relatively constant returns from its operations. Average annual profit figures are as follow...

A: Debt amount = 3,000,000 Coupon Rate = 8% Tax Rate = 35% Weighted average cost of capital = 15%

Q: (a)What is the significance of the internal growth rate? The sustainablegrowthrate? (b)Assume that ...

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any ...

Q: Commercial letter of credit are? customarily required by importers of their suppliers. n...

A: A commercial letter of credit A commercial letter of credit is written on behalf of the customer wh...

Q: As a financial manager,;one's goals for the client is to help them do the following EXCEPT: A. Buil...

A: The financial manager is the person responsible for looking after the financial health of the compan...

Q: 4. Sovereign-Tea Company projected to make even monthly cash payments of P150,000 during the year. T...

A: The Baumol model is a model for managing surplus cash through the use of stock supply quantities. It...

Q: In its first 10 years a mutual fund produced an average annual return of 19.17%. Assume that money i...

A: Future value is the total amount of money at a specified point of time.

Q: fuo0 个bb00 i= b/. $600 $1600

Q: National Co. would like to maintain its cash account at a minimum level of P25,000, but expect the s...

A: Minimum level of cash (L) = P 25000 Standard deviation (SD) = P 2000 i = 7.5% per annum = 0.0205479%...

Q: Suria hopes to deposit RM3,500 annually in an account that earns 10 percent compounded semiannually ...

A: Future Value The future value is the amount that will be received at the end of a certain period. Th...

Q: To rent an apartment, Nick has to pay the first month of rent plus the last month of rent and a secu...

A: Under the cash advancement on the credit card system, the borrower is able to borrow money and has t...

Q: gage Dr. Gupta is considering a 30-year mortgage at 6% interest. She can make payments of $3500 a mo...

A: The amount of mortgage one can afford depends on the time and interest rate of the money.

Q: 5. Today, an antique car that originally cost $3,773 in 1955 is valued today at $69,500 if in excell...

A: This question requires to find the value of unknown variable using the given values.

Q: A firm's bond has a maturity of 10 years with a $1,000 face value, have a 8% coupon rate paid semi-a...

A: Bonds are the debt securities which are issued by the corporations or the governments to arrange the...

Q: Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current yea...

A: Sales revenue= $470,000 Cost of goods sold= $450,000 Operating expenses= $55,000 Long-term capital g...

Q: DURATUL HOLDINGS STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2021 (RM) i Sales for 2021 was RM...

A: Retained earning is the earning which is not distributed as dividend and can be used for further exp...

Q: Calculate the standard time if the observed time is 0.75 min, the performance rating is 110 percent,...

A: Time study is the study in which time required in order to complete an activity will be recorded. Ob...

Q: Lux Co. is considering whether to pursue a restricted or relaxed current asset investment policy. Th...

A: Return on Equity measures the profitability of equity funds invested in the firm. This ratio reveal...

Q: Which of the following statements is correct? O Flotation costs under a best-efforts arrangement typ...

A: The process of issuing shares of a private firm to the public in a new stock issue is known as an in...

Q: With regards to group life insurance, which of the following statements are true? 1. An individual ...

A: An employer or similar large-scale body, such as an association or labor organization, may provide g...

Q: Describe why financial management within an organization is such a difficult task and importance of ...

A: Financial management (FM) means managing all the activities which are related to funds like financin...

Q: 6. A concrete pavement on a street would cost P 20,000 and would last for 5 years with negligible re...

A: Current cost (C) = P 20,000 Period (n) = 5 Years Removal cost (RC) = P 1500 Interest rate (r) = 5%

Q: One Corporation has two potential suppliers. Both are supplying the items at similar list prices and...

A: Trade credit: It is an agreement between supplier of goods and buyer where buyer agrees to pay the a...

Q: Q4: Consider the following cash flow diagram. What is the value of X if the present worth of the dia...

A: Present Worth: It is the present value of the future annual cash flows or future sum of money. Prese...

Q: What amount of money invested today at 10% interest can provide the following scholarships: P30,000...

A: The present value method is the method of finding out how much all the future cash flows are worth t...

Q: ale posits 4 700 at the end of mary Every quarter for 5 yours aud 6 Months u a cnd 6 retiremment fun...

A: The question is based on the concept of the time value of money to find future value. The annuity ca...

Q: What is the market Risk Premium? a. 3% b. 7% c. 10% d. 13% Option 2

A: Market Risk Premium refers to the additional return earned above the risk free rate by the market .H...

Question

Jerome borrows ₱75,000 from the bank that advertises a 8% of simple interest rate and repays the loan in six equal monthly payments.

Find the finance charge and estimate the annual percentage rate.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?
Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. $2,600 B. $7,800 C. $137,800 D. $132,600
Iskandar has to pay RM19 000 in total to settle a three-year loan by making equal monthly payments to Hebat Bank. The bank charges him 5.5% compounded quarterly.
Jerome obtains Php 15,000 as the proceeds of a 300-day loan from a bank charging 5% Discount. What will Jerome pay at the maturity date?
A man borrowed a certain sum of money from a bank which charges interest at 18%, compounded quarterly. He promised to pay the principal and interest through 36 equal payments of PHP 4,000 at the end of each three months. How much did he borrow?
Chuong Ngo borrows 4800$ from a bank that advertises a 6% simple interest rate and repays the loan in six equal monthly payments. Estimate the APR. Round to the nearest tenth of a percent. Use the approximate annual percentage rate formula.
An individual borrows $4,500 from the bank to be repaid in three equal annual installments, with the first installment to be paid one year after the loan amount is received. If interest on the loan is charged at a rate of 9 per cent per annum compounded annually, to the nearest dollar the annual installment is a. $1,259 b. $1,373 c. $1,778 d. $1,631
East Side Bank offers the following effective rates on 5-year loans: 8% for the first two years, 10% for the third year, 11% for the fourth year, and 12% on the fifth year. If Php. 500 000.00 is borrowed, determine the lump-sum amount to be paid at the end of the loan period.
Carol borrows $30, 000 from the bank. For a six-year loan, the bank requires annual end-of-year payments of $5, 878.05. The annual interest rate on the loan is?
Kathy borrows $10,000 from the bank. For a four year loan, the bank requires annual end of year payments of $3,223.73. The annual interest rate on the loan is
Bank America offers a stated annual interest rate of 5.0 percent, compounded quarterly, while Bank USA offers a stated annual interest rate of 5.10 percent, compounded monthly. In which bank should you deposit your money?
Juan dela Cruz borrowed money from a bank. He received P1, 340 and promised to pay P1, 500 at the end of 9 months. Determine the following:The rate of simple interest.The corresponding discount rate.