In: Finance

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?

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 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 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 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 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 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 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 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 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?

ADVERTISEMENT

ADVERTISEMENT

Latest Questions

- i'm doing a small research about 2 pages only on "Applications of (relative acceleration and relative...
- How to improve road with : •Not well managed and protected junction . •Road without markings...
- Describe how organisms are placed in the Three Domain (Woese-Fox) classification system vs how organisms are...
- What variables would you use to segment markets for: Old Spice, iPad, and Chevy Volt.
- Why did the 1969 occupation of Alcatraz occur? What was the significance of Alcatraz to the...
- Main Street Ice Cream Company uses a plantwide allocation method to allocate overhead based on direct...
- Design a meaningful study in a well-equipped lab that will determine the impact of pH change...

ADVERTISEMENT