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A: Discount = Amount*Interest rate*Time period/12 Proceeds= Principal Amount- Discount
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A: Using excel PMT function to calculate the monthly payment
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A: The Future Value of the annuity is the total value of all the payments which is occurred regularly…
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A: Given: Loan = $18,000 Interest rate = 4.2% Years = 6
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Q: A recent graduate's student loans total $17,000. If these loans are at 5%, compounded quarterly, for…
A: Given: Loan amount = $17,000 Interest rate = 5% Years = 8
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- Gifts Galore Inc. borrowed 1.5 million from National City Bank. The loan was made at a simple annual interest rate of 9% a year for 3 months. A 20% compensating balance requirement raised the effective interest rate. a. The nominal annual rate on the loan was 11.25%. What is the true effective rate? b. What would be the effective cost of the loan if the note required discount interest? c. What would be the nominal annual interest rate on the loan if the bank did not require a compensating balance but required repayment in three equal monthly installments?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. $132,600Del 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 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?Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for five years. What is the NPV using 8% as the discount rate?Suppose you borrowed $30,000 on a student loan at a rate of 8% and must repay itin three equal installments at the end of each of the next 3 years. How large wouldyour payments be; how much of the first payment would represent interest, howmuch would be principal; and what would your ending balance be after the firstyear? (PMT = $11,641.01; Interest = $2,400; Principal = $9,241.01; Balance atend of Year 1 = $20,758.99)
- You borrow $5,000 at 10% per year and will pay off the loan in 3 equal annual payments starting 1 year after the loan is made. The end-of-year payments are $2,010.57. Which of the following is true for your payment at the end of year 2? a. Interest is $500.00 and principal is $1,510.57 b. Interest is $450.00 and principal is $1,560.57 c. Interest is $348.94 and principal is $1,661.63 d. Interest is $182.78 and principal is $1,827.79.Aragon credit Union offers to lend Cassidy $35,000 to buy a car; the loan calls for payments of $855.99 per month for 4 years. Which of the following statement is most CORRECT? (Use 6 decimal places) a. The effective annual rate of interest is 8.401 percent b. The monthly rate of interest is .7050 percent. c. The nominal annual rate of interest is 6.7446 percent. d. The monthly annual rate of interest is .7000 e. The effective annual rate of interest is 8.0941)If $1180 accumulates to $1566.75 in four years, six months compounded semi-annually, what is the effective annual rate of interest. 3 ) Thomas is planning to withdraw $7000 from a savings account at the end of each quarter for three years. If the payments are deferred for six years and interest is 5.78% compounded semi-annually, what amount has to be invested now into the savings account. 4 ) Victoria saved $306 every six months for eight years. What nominal rate of interest compounded annually is earned if the savings account amounts to $5770 in eight years?.
- a.) An amount of P14,000 is borrowed at a discount rate of 10%, find the proceeds if the length of the loan in 180 daysb.) A deposit of P1500 is made into a fund on March 18. The fund earns simple interest at 5%. On August 5, the interest rate changed to 4.5%. How much is in the fund on October 23?c.) How long will it take any sum to double itself with an 11 percent simple interest?The SIBL offers 8.5% interest, compounded quarterly on term borrowing. The DBBL Offers 8.25% interest, compounded monthly. Based on effective interest rate, in which bank would you prefer to borrow fund and justify your findings. Define effective annual rate (EAR) with examples. Differentiate between annuity cash flows and mixed stream with example Ishraf got his driving license one week back, and he wants to buy a new car for 12,50000Tk. He has lump sum amount of 375000Tk. today to invest. Ishraf is a risk averse investor and he has following investment options after approaching different banks. BRAC Bank offers 12.25% term deposit compounded semi-annually. NRB Bank offer 12% term deposit compounded quarterly. Padma Bank offers 12.85% term deposit compounded monthly. Calculate how long will it take for Ishraf to accumulate enough money to buy a car in each of the three cases?you have borrowed $11,200 for school expenses at 6% simple interest rate for 6 years. After six years you would pay $4032 in simple interest. Now, suppose the bank splits the loan into 6 one year loans