What is the annual interest rate if a simple interest loan of $10,000 for 4 years charges a total of $2,800 interest? The loan is repaid with a single payment at the end of year 4 Select one: a. 28% b. 7% c. i such that 12800= 10000(F/P,i,4) d. cannot be determined from the

What is the annual interest rate if a simple interest loan of $10,000 for 4 years charges a total of $2,800 interest? The loan is repaid with a single payment at the end of year 4 Select one: a. 28% b. 7% c. i such that 12800= 10000(F/P,i,4) d. cannot be determined from the

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 14P

See similar textbooks

Related questions

Q: A loan 1000 is repaid by equal annual amounts of principal for 10 years and annual interest of 7% on…

A: Equal installment = Loan Amount / present value annuity Factor @rate of interest for life

Q: Assume an interest rate of 8%. You borrow $10,000 to be repaid in seven equal annual end-of-period…

A: Deferred annuity is the regular series of payments or receipts that last over a specific period of…

Q: Prepare an amortization schedule for a three-year loan of $93,000. The interest rate is 8 percent…

A: Loan amount (PV) = $93000 Interest rate (r) = 8% Number of annual payments (n) = 3

Q: Deshaun took out a loan for $6100 that charges an annual interest rate of 9.7%, compounded daily.…

A: Part (a): Calculation of amount owned after one year: Answer: Amount owned after one year is…

Q: What is the annual interest rate if a simple interest loan of $10,000 for 4 years charges a total of…

A: When interest rate is simple interest: Interest = Principal*time*rate time and rate should be of…

Q: For a $100,000 mortgage for 25 years at a 11.5% rate (monthly payments), find 1) the monthly…

A: Given information : Note : As per the guidelines, only first three parts will be answered.

Q: How much higher or lower is the effective annual rate charged by Midwest versus the rate charged by…

A: Effective Annual Interest Rate: It is the interest rate adjusted over a period for the effects of…

Q: An obligation of P25,000 with interest of 5% compounded semi-annually must be paid at the end of…

A: Compound interest is the extra interest to the principal amount. In simple it can be defined as…

Q: If you borrow $25,000 at an interest rate of 6%, compounded annually, with the repayment schedule as…

A: We need to discount all the future cash flows from year 1-4 and year 5-9 so that the total sum of…

Q: A loan is repaid with equal annual payments of $450 at the end of each year for 10 years AEIR-3% for…

A: If a payment is made repeatedly for certain period at regular intervals it is termed as Annuity.…

Q: A loan of £8,000 is to be repaid by level monthly instalments of 185 in arrear over a period of 4…

A: given, P=8000 n=4 m=12 A=185

Q: ₱50,000.00 loan is payable in 3 years. To repay the loan, the debtor must pay an amount of every 6…

A: Loan amount (PV) = P 50,000 Period = 3 Years Number of semi annual payments (n) = 3*2 = 6 Annual…

Q: You take out 1 $10,000 loan for 7 years at an annual interest rate of 5% and with fixed annual loan…

A: Borrowed amount is $10,000 Annual interest rate is 5% Payment per year is $1,728.20 To Find:…

Q: For a repayment schedule that starts at end of year (EOY) four at $Z and proceeds for years 4…

A: Given: Principal = $10000 Int Rate i=7% Tenure is 10-4 = 6 YrsPayment starts at end of 4 yrs.…

Q: In an amortization table for a four-year loan of $45,280, given an interest rate of 11%, how much…

A: N = 4 years Loan = $45,280 Interest Rate = 11% Principal payment in second year = ?

Q: onsider a $15,000 loan to be repaid in equal installments at the end of each of the next 5 years.…

A: As per the guidelines in case of multiple question we are supposed to answer only the first…

Q: You borrow $1,000,000 at 3% compounded semi-annually and will pay it off over bi-weekly (every two…

A: Installment is the amount of periodic payments a borrower has to make to its lender in order to pay…

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: A loan of P40,000.00, with interest at 6% payable semiannually is to be amortized by equal payments…

A: Loan (X) = P 40000 r = 6% per annum = 3% semiannually n = 5 years = 10 payments Let periodic payment…

Q: If the proceeds of a loan of P12,450 will be paid with P12,840 at the end of 1 year and 9 months.…

A: Loan amount = P 12450 Par value = P 12840 Discount amount = Par value-Loan amount…

Q: For a repayments schedule that starts at the end of year 5 at $A and proceeds for years 6 through 40…

A: A loan is a type of borrowing that is taken from a financial institution by a borrower and the…

Q: In a discount interest loan, you pay the interest payment up front. For example, if a 1-year loan is…

A: Given: Interest rate = 8.50% Amount borrowed = $42,000 Interest amount = $3,570 Net loan = $38,430

Q: P2,000 loan was originally made at 8% simple interest for 4 years. At the end of this period, the…

A: Under simple interest , interest is calculates on principal amount of loan. Formula of interest is…

Q: SunBlush Technologies takes out a $16,000 loan that charges 5.25% interest compounded semi-annually…

A: Loan and its repayments: A loan taken out can be repaid in equal periodic instalments over the loan…

Q: 1.What is the future value of $2,000 after 3 years if the interest rate is 8%, compounded…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: You borrow $1,000,000 at 3% compounded semi-annually and will pay it off over bi-weekly (every two…

A: Installment is equal periodic payments a borrower pays in order to pay back his loan over a period…

Q: Toyota S murang auto finance company is prepared to offer you a loan of $38,000 to buy a new Toyota…

A: Loan amount (L) = $38000 n = 7 years r = 12% Let A = Annual repayment

Q: What is the balance of the loan at the end of year 3? $0.00 Round to the nearest cent c. By how much…

A: Loans are paid by the monthly equated payments that carry the payment for loan principal amount and…

Q: A loan is to be repaid by $1250 in 1.5 years and $1750 in three years and three months . The…

A: Given information: Loan to be repaid is $1,250, Number of years is 1.5 Outstanding loan amount is…

Q: A businessman wishes to borrow an amount of K3 million for a term of 5 years. The agreed rate of…

A: Loan amount is K3000000 Time period is 5 years. rate of interest is 5% per year for three years…

Q: You plan to borrow $43,100 at an 8.0% annual interest rate. The terms require you to amortize the…

A: Given, Loan amount = $43,100 Annual interest rate (r) = 8% Number of years = 7 Annual equal…

Q: Prepare an amortization schedule for a three-year loan of $57,000. The interest rate is 8 percent…

Q: Crab State Bank has offered you a $1,500,000 5-year loan at an interest rate of 9.25 percent,…

A: The following information given in the question: Loan amount $1,500,000 P Loan term (in years)…

Q: Buzz received a 5-year $130000 loan at 4% p.a. monthly reducible interest. If the interest rate was…

A: Hi, since you have posted multiple question, we will answer the first one, as per the authoring…

Q: The other photo is the example of the format of the supposed answer (solution and Excel). Thank you…

A: Information Provided: Loan amount (P) = 1,400,500.00 Interest rate (j) = 5+1/8% = 5.125% Years (t)…

Q: A loan of P50k requires quarter payments of P2875 over 10-year period. These payments include…

A: Loan amount (L) = P 50000 Quarterly payment (Q) = P 2875 Duration (n) = 10 years = 40 payments Let r…

Q: 3) You are loaned 810,000 at an effective annual interest rate of i = 7% and agree to pay this back…

A: The loan refers to the amount that a borrower takes from the lender at a fixed rate of interest for…

Q: 1. Let's assume that a loan of $100,000 with an annual interest rate of 6% over 30 years pays…

A: Accumulation rate is the increase in size of asset, position or overall buying activity of…

Q: 1. Suppose you borrow $16,000. The interest rate is 10%, and it requires 4 equal end-of-year…

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

Q: A loan is to be repaid by $1500 in one year and $2250 in four years. The borrower has asked to repay…

A: Outstanding loan amount is $1500 (due in 1 year) and $2250 (due in 4 years). Present value and…

Q: Prepare an amortization schedule for a three-year loan of $60,000. The interest rate is 6 percent…

A: The amortization schedule can be prepared as follows:

Question

What is the annual interest rate if a simple interest loan of
$10,000 for 4 years charges a total of $2,800 interest?
The loan is repaid with a single payment at the end of
year 4
Select one:
а. 28%
b. 7%
c. i such that 12800= 10000(F/Pi,4)
d. cannot be determined from the
information given

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 Analysis

VIEW

Step 2 Calculation of rate of return

VIEW

Step 3 Conclusion

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

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

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
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
Calculating interest and APR of installment loan. Assuming that interest is the only finance charge, how much interest would be paid on a 5,000 installment loan to be repaid in 36 monthly installments of 166.10? What is the APR on this loan?
Effective Cost of Short-Term Credit Yonge Corporation must arrange financing for its working capital requirements for the coming year. Yonge can: (a) borrow from its bank on a simple interest basis (interest payable at the end of the loan) for 1 year at a 12% nominal rate; (b) borrow on a 3-month, but renewable on rate with 12 end-of-month payments; or (d) obtain the needed funds by no longer taking discounts and thus increasing its accounts payable. Yonge buys on terms of 1/15, net 60. What is the effective annual cost (not the nominal cost) of the least expensive type of credit, assuming 360 days per year?
Calculating and comparing add-on and simple interest loans. Eli Nelson is borrowing 10,000 for five years at 7 percent. Payments, which are made on a monthly basis, are determined using the add-on method. a. How much total interest will Eli pay on the loan if it is held for the full five-year term? b. What are Elis monthly payments? c. How much higher are the monthly payments under the add-on method than under the simple interest method?
You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
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?
A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an annual interest rate of 11%. If 6 months have passed since note establishment, what would be the recorded interest figure at that time? A. $7,150 B. $65,000 C. $14,300 D. $2,383