local finance company quotes a 17% interest rate on one-year loans. So, d you borrow $25.000, the interest for the year will be $4,250 Since you must repay a total of $29.250 in one year, the finance company requires you to pay $29.250/2. or $243250, per month over the next 12 months. Is this a 17% loan? What rate would legally have to be quoted? (De net reund intermediate calculations. Round the final answer to 2 decimal places) Annual percentage rate What is the effective annual rate? (De not round intermediate calculations. Round the final answer to 2 decimal places) ffective annual rate

local finance company quotes a 17% interest rate on one-year loans. So, d you borrow $25.000, the interest for the year will be $4,250 Since you must repay a total of $29.250 in one year, the finance company requires you to pay $29.250/2. or $243250, per month over the next 12 months. Is this a 17% loan? What rate would legally have to be quoted? (De net reund intermediate calculations. Round the final answer to 2 decimal places) Annual percentage rate What is the effective annual rate? (De not round intermediate calculations. Round the final answer to 2 decimal places) ffective annual rate

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 19P

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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
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?
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?
A local finance company quotes a 12 percent interest rate on one-year loans. So, if you borrow $30,000, the interest for the year will be $3,600. Because you must repay a total of $33,600 in one year, the finance company requires you to pay $33,600/12, or $2,800.00, per month over the next 12 months. a.What rate would legally have to be quoted? b.What is the effective annual rate?
A local finance company quotes a 17 percent interest rate on one-year loans. So, if you borrow $30,000, the interest for the year will be $5,100. Because you must repay a total of $35,100 in one year, the finance company requires you to pay $35,100/12, or $2,925.00, per month over the next 12 months. a. What rate would legally have to be quoted? b. What is the effective annual rate?
A local finance company quotes a 17 percent interest rate on one-year loans. So, if you borrow $23,000, the interest for the year will be $3,910. Because you must repay a total of $26,910 in one year, the finance company requires you to pay $26,910 divided by 12, or $2,242.50, per month over the next 12 months. Is this a 17 percent loan? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) What rate would legally have to be quoted? Annual percentage rate % What is the EAR? Effective annual rate %
A local finance company quotes an interest rate of 16.7 percent on one-year loans. So, if you borrow $25,000, the interest for the year will be $4,175. Because you must repay a total of $29,175 in one year, the finance company requires you to pay $29,175/12, or $2,431.25 per month over the next 12 months. Is the interest rate on this loan 16.7 percent? What rate would legally have to be quoted? What is the effective annual rate?
A local finance company quotes a 12 percent interest rate on one-year loans. So, if you borrow $40,000, the interest for the year will be $4,800. Because you must repay a total of $44,800 in one year, the finance company requires you to pay $44,800/12, or $3,733.33, per month over the next 12 months. a. What rate would legally have to be quoted? Annual percentage rate 21.46% b. What is the effective annual rate? 23.70% Effective annual rate
A local finance company quotes an interest rate of 17.2% on one-year loans. So, if you borrow $25,000, the interest for the year will be $4,300. Because you must repay a total of $29,300 in one year, the finance company requires you to pay $29,300/12, or $2,441.67 per month over the next 12 months. What is the effective annual rate?
New Town Bank offers you a line of credit of $50,000 with an interest rate of 2.1 percent per quarter. The loan agreement also requires that 2.5 percent of the unused portion of the credit line be deposited in a non-interest-bearing account as a compensating balance. Short-term investments are currently paying .68 percent per quarter. What is the effective annual interest rate on the line of credit if you borrow the entire amount for one year? Assume any funds borrowed or invested use compound interest. O 8.40 percent 8.89 percent Q 8.67 percent O 8.51 percent O 8.62 percent
New Town Bank offers you a line of credit of $50,000 with an interest rate of 2.1 percent per quarter. The loan agreement also requires that 2.5 percent of the unused portion of the credit line be deposited in a non-interest-bearing account as a compensating balance. Short-term investments are currently paying .68 percent per quarter. What is the effective annual interest rate on the line of credit if you borrow the entire amount for one year? Assume any funds borrowed or invested use compound interest. 8.40 percent 8.89 percent O 8.67 percent 8.51 percent 8.62 percent
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 $). (Round your answer to the nearest cent.) $ 8938.537