Your firm is considering a one-year loan for $522,000. The fees are 2% of the loan amount and the interest rate is 4.3%. First, compute the net amount of funds from the loan. Based on this net amount, what is the true interest rate of the loan?
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Your firm is considering a one-year loan for $522,000. The fees are 2% of the loan amount and the interest rate is 4.3%. First, compute the net amount of funds from the loan. Based on this net amount, what is the true interest rate of the loan?
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- Your firm is considering two one-year loan options for a $506,000 loan. The first carries fees of 2.4% of the loan amount and charges interest of 3.6% of the loan amount. The other carries fees of 1.8% of the loan amount and charges interest of 4.7% of the loan amount. a. What is the net amount of funds from each loan? b. Based on the net amount of funds, what is the true interest rate of each loan?Your firm is considering a one-year loan for $522,000. The fees are 2% of the loan amount and the interest rate is 4.3%. First, compute the net amount of funds from the loan. Based on this net amount, what is the true interest rate of the loan? Group of answer choicesSuppose your firm is seeking a seven - year, amortizing $770,000 loan with annual payments, and your bank is offering you the choice between a loan of $817,000 with a compensating balance of $47,000 and a loan of $770,000 without a compensating balance. The interest rate on the $770,000 loan is 8.0 percent. How low would the interest rate on the loan with the compensating balance have to be for you to choose it?
- Suppose that you're planning a vacation and borrow $2,000 from a bank for one year at a stated annual interest rate of 14 percent, with interest prepaid (a discount interest loan). Also, assume that the bank requires you to maintain a compensating balance equal to 10 percent of the initial loan value. What effective annual interest rate are you being charged?Suppose you buy a $40,000 car and you 'put down' $5,000 and finance the rest for 72 months at 3.75% annual rate. Over the entire life of the loan, how much will you have paid in Interest on the loan?Suppose you take out a 36-month installment loan to finance a delivery van for $26,100. The payments are $985 per month, and the total finance charge is $9,360. After 25 months, you decide to pay off the loan. After calculating the finance charge rebate, find your loan payoff (in $) Round to the nearest cent
- Mr. Pereira needs $1,000,000 today. He has quoted in the bank 3 types of loans with the following conditions:(a) 1 year term loan with annual rate of 12% capitalizable monthly, with monthly payments.b) 2-year term loan with an annual rate of 8%, capitalized bimonthly, with bimonthly payments.c) 4-year term loan with an annual rate of 6% capitalized quarterly with quarterly payments.As a consultant, you must evaluate these three alternatives today by calculating what the situation of the loans will be in month No. 6, asking to indicate at that date the value of interest paid and interest payable on the 3 loans, the value of the amortized capital and what remains to be amortized on these loans.Suppose you take out a 36-month installment loan to finance a delivery van for $26,100. The payments are $987 per month, and the total finance charge is $9,432. After 25 months, you decide to pay off the loan. After calculating the finance charge rebate, find your loan payoff (in $).Suppose you borrow $2,000 from a bank for one year at a stated annual interest rate of 14 percent, with interest prepaid (a discounted loan). Also, assume that the bank requires you to maintain a compensating balance equal to 20 percent of the initial loan value What effective annual interest rate are yo being charged
- What would be the total interest paid on a $5,000 loan with a rate of 1% interest when the payment is $250 a month?A company has the following payment options to settle a loan: ■ Option A: To pay $19,000 today, or ■ Option B: To pay $10,000 today and $9500 in one year. If money earns 4% compounded daily, which option is more economical for the company and by how muchYou are going to buy new machinery worth$36,200. The dealer computes your monthly paymentto be $735.25 for 72 months of financing. What is thedealer’s effective rate of return on this loan transaction?
