UPENN: LOOSE LEAF CORP.FIN W/CONNECT
17th Edition
ISBN: 9781260361278
Author: Ross
Publisher: McGraw-Hill Publishing Co.
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Chapter 4, Problem 63QP
Summary Introduction
To determine: The effective annual rate and the annual percentage rate on the two loans.
Annuity refers to the payments of equal amount to be made after certain periods. These payments are made monthly, semi-annually or annually.
Effective Annual Rate:
The effective annual rate is the rate which is incurred or received on the various investment or loans. The effective annual rate is affected by the increase in compounding years.
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Students have asked these similar questions
Two banks in the area offer 20-year, $270,000 mortgages at 5.6 percent and charge a
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and Trust is refundable if the loan application is denied, whereas that charged by I. M.
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but this is not required with nonrefundable fees (presumably because refundable fees
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What are the EARs on these two loans? What are the APRS? (Do not round intermediate
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refundable loan application fee. The current disclosure law requires that any fees that
will be refunded if the applicant is rejected be included in calculating the APR.
What is the APR that they are required to disclose? (Do not round intermediate
calculations and round your final answers to 2 decimal places. (e.g., 32.16))
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On January 1, 20x1, an entity obtains an 11%, P5,000,000 bank loan. The bank charges the entity an 8.74% nonrefundable loan origination fee. The principal on the loan matures on December 31, 20x4 but interest is due annually every December 31.
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Compute for the initial carrying amount of the loan.
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Compute for the carrying amount of the loan on December 31 20x1.
Chapter 4 Solutions
UPENN: LOOSE LEAF CORP.FIN W/CONNECT
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