Question
In: Finance
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?
Solutions
Expert Solution
Therefore,
a) Rate to be legally quoted is APR = 30.0262%
b) Effective Annual Rate = EAR = 34.5232%
jeff jeffy answered 2 years agoRelated Solutions
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 an interest rate of 18.1 percent on one-year loans. So, if...
A local finance company quotes an interest rate of 18.1 percent on
one-year loans. So, if you borrow $39,000, the interest for the
year will be $7,059. Because you must repay a total of $46,059 in
one year, the finance company requires you to pay $46,059/12, or
$3,838.25 per month over the next 12 months.
What rate would legally have to be quoted? (Do not round
intermediate calculations and enter your answer as a percent
rounded to 2 decimal places,...
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 $35,000, the interest for the
year will be $6,300. Because you must repay a total of $41,300 in
one year, the finance company requires you to pay $41,300/12, or
$3,441.67, per month over the next 12 months.
a. what rate would legally have to be quoted?
b. what is the effective annual rate?
The Bank quotes the interest rate on loans as 12% per annum continuously compounded. The interest...
The Bank quotes the interest rate on loans as 12% per annum
continuously compounded. The interest is actually paid monthly on a
$6911 loan. What is the interest payment (in $) of this loan per
month?
Aisva credit card company quotes you a rate of 14.9 percent. Interest is compounded monthly. What...
Aisva credit card company quotes you a rate of 14.9 percent.
Interest is compounded monthly. What is the actual rate (EAR) of
interest you are paying? show all work
Bank Monash quotes the interest rate on loans as 5% per annum continuously compounded. The interest...
Bank Monash quotes the interest rate on loans as 5% per annum
continuously compounded. The interest is actually paid monthly on a
$3752 loan. What is the interest payment (in $) of this loan per
month?
p.s That's the whole problem. It didn't provide any info about
the duration.
Assume the following information: One-year interest rate in New Zealand 5 percent One-year interest rate in...
Assume the following information:
One-year interest rate in New Zealand
5 percent
One-year interest rate in U.S
12 percent
Spot rate NZ$
$0.60
Forward rate NZ$
$0.54
initial investment of $10,000,000 (US (NZ) dollars for US (NZ)
investor
Is covered interest rate possible for US investors? New Zealand
investors? Explain why covered interest rate arbitrage is or is not
feasible.
Carson company has obtained substantial loans from finance companies and commercial banks. The interest rate on...
Carson company has obtained substantial loans from finance
companies and commercial banks. The interest rate on loans is tied
to market interest rates and is adjusted every six months. Because
of its expectations of a strong US economy, Carson plans to grow in
the future by expanding its business and making acquisitions. It
expects that it will need substantial loan-term financing and plans
to borrow additional funds through loans or by issuing bonds. It is
also considering stock to raise...
Prepare amortization schedule for a five-year loan of $167,500. The interest rate is 17 percent per...
Prepare amortization schedule for a five-year loan of $167,500.
The interest rate is 17 percent per year and the loan calls for
equal annual payments. How much interest is paid in the third year?
How much total interest is paid over the life of the loan?
(No excel sheet)
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Briefly describe the rhetorical methods of development. Which of the rhetorical methods of development will be...
- C++ Question1. Create a class called Rantional for performing arithmatic with fractions. Then write a program...
- Balanced scorecards are widely used by companies to “balance” their financial with nonfinancial objectives. Do a...
- Assume a 2.8 MByte file is being uploaded from a client application to a web server....
- Question #14. a. TRUE OR FALSE: Code written using a case/switch construct can always be rewritten...
- Problem 18-14 Beta and Leverage Fitzgerald Industries has a new project available that requires an initial...
- What are the accounts that make up Shareholder’s Equity on the Balance Sheet?
ADVERTISEMENT