Question

In: Finance

The National Bank of Mayville quotes an APY of 3.5 percent on a one-year money market...

The National Bank of Mayville quotes an APY of 3.5 percent on a one-year money market CD sold to one of the small businesses in town. The firm posted a balance of $2,500 for the first 90 days of the year, $3,000 over the next 180 days, and $4,500 for the remainder of the year.

How much in total interest earnings did this small business customer receive for the year?

Solutions

Expert Solution


Related Solutions

The bank lends money to clients at a rate of 3.5% per week. [a] What is...
The bank lends money to clients at a rate of 3.5% per week. [a] What is the nominal interest rate for these loans? [b] What is the effective annual interest rate?
A local finance company quotes an interest rate of 18 percent on one-year loans. So, if...
A local finance company quotes an interest rate of 18 percent on one-year loans. So, if you borrow $32,000, the interest for the year will be $5,760. Because you must repay a total of $37,760 in one year, the finance company requires you to pay $37,760/12, or $3,146.67, per month over the next 12 months.    a. What interest rate would legally have to be quoted? (Do not round intermediate calculations and enter your answer as a percent rounded to...
A local finance company quotes an interest rate of 16 percent on one-year loans. So, if...
A local finance company quotes an interest rate of 16 percent on one-year loans. So, if you borrow $30,000, the interest for the year will be $4,800. Because you must repay a total of $34,800 in one year, the finance company requires you to pay $34,800/12, or $2,900.00, per month over the next 12 months. What rate would legally have to be quoted?
A local finance company quotes a 17 percent interest rate on one-year loans. So, if you...
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?
Discuss money markets. Money market securities are debt offerings with a maturity of one year or...
Discuss money markets. Money market securities are debt offerings with a maturity of one year or less. They are very liquid and can be sold in a secondary market. Discuss the contents of the most popular money market securities and whether money market securities can be justified by scripture.
1.  Suppose you put some money in a bank account.  After one year, you have enough money to...
1.  Suppose you put some money in a bank account.  After one year, you have enough money to buy 3% more worth of goods than you can buy today.  What statement must be true? A.  Nominal interest rate is 3% B.  Real interest rate is 3% C.  Nominal interest rate exceeds real interest rate by 3% D.  Inflation is 3% E.  Inflation is negative                                                                                                                                                                   ______ 2.  Consumers in a certain region typically buy apples and bananas.  If the price of apples were to rise dramatically, while the price of bananas stays...
A bank invested $50 million in a one-year asset paying 10 percent interest per year and...
A bank invested $50 million in a one-year asset paying 10 percent interest per year and simultaneously issued a $50 million, two-year liability paying 8 percent interest per year to pay for it. • Is the bank short funded or long funded? • What is the bank’s net interest income in year one • What will be the bank’s net interest income in year two if at the end of the first year all interest rates have decreased by 1.5...
A bond quotes a rate of return of 9% and will pay $1,000 in one year...
A bond quotes a rate of return of 9% and will pay $1,000 in one year with a probability of 69% and $0 with a probability of 31%. What is the time premium? What is the default premium?
Mrs. Keiko is looking at a three-year loan of JPY 5000000. Her bank quotes the interest...
Mrs. Keiko is looking at a three-year loan of JPY 5000000. Her bank quotes the interest rate as 4 percent plus one point. According to the bank's explanations, a point on his loan is 1 percent (one percent point) of the loan amount. The interest rate quotation also requires Mrs. Keiko to pay a point to the lender upfront and repay the loan later with 4 percent pẻ annum compounding interest. Calculate the annualized interest rate would Mrs. Keiko actually...
a money market instrument has an original maturity of atleast one year. true or false?
a money market instrument has an original maturity of atleast one year. true or false?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT