23.) Charming Charlies charges a daily rate of 0.03 percent (.03% or .0003) on its store...

23.)

Charming Charlies charges a daily rate of 0.03 percent (.03% or .0003) on its store credit cards. What interest rate is the company required by law to report to potential customers?

Charming Charlies charges a daily rate of 0.03 percent (.03% or .0003) on its store credit cards. What is the effective annual rate it charges its customers?

Curtis Builders is borrowing $150,000 today for 5 years. The loan is an interest-only loan with an APR of 9.5 percent. Payments are to be made annually. What is the amount of the first annual payment?

Expert Solution

Charming Charlies charges a daily rate of 0.03 percent (.03% or .0003) on its store credit cards. What interest rate is the company required by law to report to potential customers?

The company is required to report an Annual Percentage Rate (APR) to its potential customers.

APR = 0.0003 * 365 = 0.1095

APR = 10.95%

Charming Charlies charges a daily rate of 0.03 percent (.03% or .0003) on its store credit cards. What is the effective annual rate it charges its customers?

EAR = (1 + 0.0003)^365 - 1

EAR = 0.115701749

EAR = 11.5701749%

Curtis Builders is borrowing $150,000 today for 5 years. The loan is an interest-only loan with an APR of 9.5 percent. Payments are to be made annually. What is the amount of the first annual payment?

The amount of the first annual payment = Loan amount * Interest rate

The amount of the first annual payment = 150,000 * 0.095

The amount of the first annual payment = $14,250

jeff jeffy answered 2 years ago

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