Question

In: Finance

Bank granted a 3 year credit. Each fixed installment in amount of PLN 90,000 is paid...

Bank granted a 3 year credit. Each fixed installment in amount of PLN 90,000 is paid at the begining of each 4M. The bank offers also equilibrium rate under quarterly capitalization equaling 12% p.a. Find the rate applicable to the credit offered by the bank and calculate the principal amount of this credit.

Solutions

Expert Solution

The rate i.e. applicable to the credit offered by the bank as follows:

= 12% / 4 quarters in a year

= 3%

The computation of the principal amount is shown below:

Here we applied the present value formula

Given that

RATE = 12% / 4 = 3%

NPER = 3 * 4 = 12

PMT = 90,000

FV = 0

The formula is shown below:

= -PV(RATE,NPER,PMT,FV,TYPE)

After applying the above formula, the present value is 922,736.17


Related Solutions

Calculate a dirty price of 3-year bond with a face of 1,000,000 PLN, coupons paid each...
Calculate a dirty price of 3-year bond with a face of 1,000,000 PLN, coupons paid each 4M with a rate of 9% pa., YTM 10% if there are 11 months till maturity date. Assume practical method of calculating dirty price.
You are the loan department supervisor for a bank. This installment loan is being paid off...
You are the loan department supervisor for a bank. This installment loan is being paid off early, and it is your task to calculate the rebate fraction, the finance charge rebate (in $), and the payoff for the loan (in $). (Round dollars to the nearest cent.) Amount Financed Number of Payments Monthly Payment Payments Made Rebate Fraction Finance Charge Rebate Loan Payoff $1,700 18 $128.89 13 - $ $
The minimum tax credit: a.      Provides that the amount of AMT paid by an individual in...
The minimum tax credit: a.      Provides that the amount of AMT paid by an individual in one year can be used to offset the regular tax liability of a subsequent year b.      May not be used to offset any future AMT tax liability c.      May be carried forward indefinitely as an offset against regular tax liability d.      All of the above
There is a 3-year bond available with a face of PLN 500,000, interest 6% pa, coupons...
There is a 3-year bond available with a face of PLN 500,000, interest 6% pa, coupons paid semi-annually. It is expected that the YTM will be fixed during maturity period at 8% pa. Estimate how would the PVB at issue date change if YTM were to immediately increase to 12% pa and stay fixed during maturity period? Please use the best possible estimation (approximation).
There is a 3-year bond available with a face of PLN 500,000, interest 6% pa, coupons...
There is a 3-year bond available with a face of PLN 500,000, interest 6% pa, coupons paid semi-annually. It is expected that the YTM will be fixed during maturity period at 8% pa. Estimate how would the PVB at issue date change if YTM were to immediately increase to 12% pa and stay fixed during maturity period? Please use the best possible estimation (approximation).  
A homeowner paid a fixed 3% on a 30-year mortgage of $200,000. 11a. Calculate the monthly...
A homeowner paid a fixed 3% on a 30-year mortgage of $200,000. 11a. Calculate the monthly mortgage payment. [10 points] 11b. Calculate the total interest payment over this 30-year period. [5 points] 11c. In the third monthly mortgage payment, calculate the interest payment. [5 points] 11d. In the fourth monthly mortgage payment, calculate the principal payment.
RanTech had credit sales of $100,000 in the year 2010 which required use of the installment...
RanTech had credit sales of $100,000 in the year 2010 which required use of the installment method. RanTech's cost of merchandise sold was $60,000 (RanTech uses the perpetual inventory system). RanTech collected cash related to the installment sales of $35,000 in 2010 and $30,000 in 2011. (In your calculations, ignore interest charges. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 1 would be 01/Jan)). Instructions are below:...
A loan is repaid in ten equal annual installments with the first installment paid one year...
A loan is repaid in ten equal annual installments with the first installment paid one year after the loan is made. The effective annual interest rate is 4%. The total amount of principal repaid in the fifth, sixth, and seventh payments combined is $6,083. What is the total amount of interest paid in the second, third, and fourth payments combined? Less than $2,000 At least $2,000, but less than $2,020 At least $2,020, but less than $2,040 At least $2,040,...
Question 3 Find the amount paid by each insurance company. Assume that any coinsurance requirement is...
Question 3 Find the amount paid by each insurance company. Assume that any coinsurance requirement is met. Insurance loss: $15,000 Company A coverage: $90,000 Company B coverage: $30,000 A pays: $11,250 B pays: $3750 A pays: $13,500 B pays: $1500 A pays: $10,500 B pays: $4500 A pays: $15,000 B pays: $0
9) Rohan used a fixed installment loan from his bank to buy new living room furniture....
9) Rohan used a fixed installment loan from his bank to buy new living room furniture. He borrowed $9250 and has 48 monthly payments of $230.19 each. a. Find the APR of the loan. b. Instead of making his 18th payment, Rohan decides to pay the remaining balance on the loan. How much interest will Rohan save?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT