Question

Asked Oct 28, 2019

21 views

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 choices

Step 1

The lender deducts the fees upfront while disbursing the money, so effectivly the borrower get the proceeds net of processing fees.

Step 2

Hence, the net amount of funds from the loan = Loan am...

Tagged in

Find answers to questions asked by student like you

Show more Q&A

Q: Fran Powers created following budget and reported actual spending listed. Calculate the variance for...

A: Variance:The variance can be defined as the anticipation of the squared unconventionality of a rando...

Q: 11. A company just paid a dividend of $4 and anticipates increasing its dividend at a constant rate ...

A: Calculate the required rate of return as follows:

Q: 01 O63 9a How much money should be deposited today in an account that earns 5% compounded semiannual...

A: We need to use the concept of time value of money to solve the question. According to the concept of...

Q: An investment offers a total return of 18 percent over the coming year. Janice Yellen thinks the tot...

A: Given,Total Return (Nominal Return) = 18% or 0.18Real Return = 13% or 0.13 Calculation of Inflation ...

Q: Gilmore, Inc., had equity of $175,000 at the beginning of the year. At the end of the year, the comp...

A: a) Sustainable growth rate is the rate at which the business would grow. It is calculated by multipl...

Q: If you invest $900 in a bank in which it will earn 8 percent compounded quarterly, how much will it ...

A: PV = $ 900; r = 8% compounded quarterly; m = frequency of compounding = 4 (as there are four quarter...

Q: Assume that the fund is liquidated at the end of the fourth quarter, what are the arithmetic, time-w...

A: Calculation of Arithmetic, Geometric and Dollar-Weighted Return:The Arithmetic Return is 1500%, Geom...

Q: H M 9Ro-a s re raa troese db ato a6411 6alo 5a,1908ecrcase 6. Lonnie needs extra money to buy a truc...

A: Calculate the interest amount as follows:

Q: If mutually exclusive projects with normal cash flows are being analyzed, the net present value (NPV...

A: Net Present Value (NPV) is the method by which an investor accepts or reject the project by calculat...