QUESTION 16 A Bank lends a Nesta company. R500 000 for one year at 6.48% and requires a compensating balance of 10% of the face value of the loan. The effective annual interest rate associated with the loan is ... 7.00%. 7.20%. 8.00%. 8.90%.

Q: Question 18 A loan of $100,000 is to be repaid in annual repayments over 5 years. Assuming a fixed…

A: Loan Amount = 100,000 Since semi annual compounding, we will multiply time period with 2 and divide…

Q: You purchase a home priced at 1,750,000 Php. You paid 10% as the down payment and the remaining…

A: Installment is the amount of periodic payments a borrower has to pay in order to repay his loan to…

Q: Lolly bank issues a $5 million loan to a firm with A- credit rating. The modified duration on the…

A: Solution- Loan amount = $5 million Treasury bond =3% Credit spread forward contract=$5 million…

Q: You purchase a home priced at 1,750,000 Php. You paid 10% as the down payment and the remaining…

A: Loan amount =1750000 Down payment =10% Loan amount required =0.9×1750000 Loan amount required…

Q: Question 21 Galoraz Bhd has a line of credit of RM325,000 with an interest rate of 1.85 percent per…

A:

Q: Problem 6 Epoch Record Company is negotiating with two banks for a P100,000 loan. Trust Bank…

A: Effective Rate of Interest- After taking into account the compounding element, the effective rate of…

Q: Problem 7-8 (IFRS) to a On January 1, 2021, Global Bank loaned P3,000,000. 6-year borrower. The…

A: Impairment loss in receivables: It is the loss of value in the amounts that is to be claimed  from…

Q: Example 6 A person requires a loan of R10 000. The bank offers a simple interest rate of 15% p.a..…

A: Lets understand the basics. For calculating loan period we will need to use below formula. Interest…

Q: 5. A $200 loan is offered with an annual simple interest rate of 6 percent. How much would the…

A: Solution:- When a loan is taken, the lender charges interest on it and in simple interest method,…

Q: Loan amount = $175,591 Assume that your broker agents introduce/assess you to a local bank of…

A: Mortgage relates to a long-term fixed asset financing option where bank makes payment for fixed…

Q: Gifts Galore Inc. borrowed $1.5 million from National City Bank. The loanwas made at a simple annual…

A: The effective annual rate of interest is the actual or the real rate of interest paid or received…

Q: 12.) Find the simple interest on a loan of P65,000.00 if the loan is given at a rate of 8% andis due…

A:

Q: Bank A pays 11.50% annual interest, compounded quarterly, on its savings accounts. Bank B wants to…

A: Effective rate of interest can be calculated by using this equation  Effective rate =(1+i/m)m -1…

Q: Montross Inc. needs to raise $300,000 for a nine-month term. Montross’s bank has offered to lend…

A: Given:

Q: P15–14 Integrative: Comparison of loan terms  Cumberland Furniture wishes to establish a prearranged…

A: The real interest that an investor earns on the investment and a borrower pays on the loan after…

Q: 7: A company borrows US dollars at 5.1% for 183 days and then at maturity refinances the principal…

A: Interest for 183 days: Let the Principal be $100Interest=$100×5.1%×183365=$2.56 Interest for the…

Q: 13. Kenneth's Arrows and Bows borrow P10,000 for one year at 12% interest. What is the effective…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: 13. Francis Company's bank require s a compensating balance  of 20% on a P100,000 loan. If the…

A: Compensating Balance: A compensating balance is a minimum amount of bank account balance that the…

Q: 27. Study the amortization schedule and fill in the blanks. 28. A loan amounting to P100,000 is to…

A: Loan amortization schedule refers to a schedule which is used to shows the periodic loan payments,…

Q: .Compute the rate (in %) for the loan. Round answers to the nearest tenth of a percent; use ordinary…

A: Given, Principal $2000 Time is 2 years Interest is $360

Q: Note: answer it " all " correctly. Justify your answer by showing solution of your choice If not I…

A: Comment - We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: a) A bank offers to lend you K1,000 if you sign a note to pay K1,610.50 at the end of 5  years. What…

A: As multiple questions have been asked, only the first question will be answered as per the…

Q: 12. A bank offers a 272 - day discounted loan at a simple discount rate of 12%. (a) How much money…

A: Simple discount loan is the loan which is given to the receiver after applying a simple discount…

Q: 14. A loan of $17,000 is made at 4.99% simple discount interest for 180 days. a. What are the…

A: Face Value of Loan= $17000 Bank Discount Rate= 4.99% Duration of loan= 180 days

Q: First National bank charges 12.4 percent compounded monthly on its business loans. First United Bank…

A: Effective annual interest rate is the real rate that we earn on our savings or paid onto a loan when…

Q: 11. BONUS: A business wants to borrow $300,000 from a bank for a future investment. The bank offers…

A: Sinking Fund is a fund that is created to meet any future known liability. Equal Amount of deposits…

Q: Question 10 Suppose the person holding the promissory note from the above problem sells the note…

A: As you have asked multiple questions, we solve the first question as per the policy of Bartleby.…

Q: Problem 5 Ready Flashlights, Inc. needs P300,000 to take a cash discount of 2/10, net 70. A banker…

A: The Effective Annual Rate (EAR) seems to be the interest rate received or payable on a loan as a…

Q: Question 16 Covidfree Corp. has a credit line of P1,500,000. The bank requires compensating balance…

A: A compensating balance is the balance a borrower must keep with a lender, usually when taking out an…

Q: 28. A loan amounting to P100,000 is to be paid annually for 4 years with an interest rate of 10% per…

A: The amortization schedule: A large loan that is taken is usually repaid in smaller equal periodic…

Q: KK Cosmetics management is setting up a line of credit at the company’s bank for $5 million for up…

A: The Effective Interest rate is computed by the sum of the interest to be paid and also the interest…

Q: 16 - What is the total interest / dividend amount to be repaid at the end of 10 years for a loan of…

A: Interest rate given is 15% PVAF at the end of year 10 = (1.15)10 = 4.0455 Value of loan after 10…

Q: 11. A $14,000 loan at 6% compounded monthly is repaid by monthly payments over four years. What is…

A: Monthly payment of loan is given by  L0 = E(1-(1+r)-n)/r Where, E = monthly payment = ? r =monthly…

Q: Problem 5 Ready Flashlights, Inc. needs P300,000 to take a cash discount of 2/10, net 70. A banker…

A:

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.