FINA4121 HW3-1

Suppose you are shopping for a mortage and the lender presents you with long menu on loan options. For each option, there is a discount point charged at an interest rate given. The amount of the point ranges anywhere from -2% to 3%. When would it be optimal for you select a loan with a discount point of 3%? Group of answer choices  1) Only when the point is equal to the effective borrowing cost  2) Never  3) Only with ARM 4) If you have a very short holding period  5) If you have a very long holding period

In cell B12, create a formula using the PMT function to calculate the monthly payments for loan Option A. Use the values in cells B8, B10, and B5 for the Rate, Nper, and Pv arguments, respectively, and do not enter any values for the optional arguments. Copy the formula you created in cell B12 into the range C12:D12.

6. Calculating simple interest and APR on a single-payment loan You are taking out a single-payment loan that uses the simple interest method to compute the finance charge. You need to figure out what your payment will be when the loan comes due. The equation to calculate the finance charge is: FsFs = P     r       t   In the equation, FsFs is the finance charge for the loan. What are the other values? P is the    amount of the loan.   r is the stated    rate of interest.   t is the term of the loan in    .   You’re borrowing $4,000 for a year and a half with a stated annual interest rate of 10%. Complete the following table. (Note: Round your answers to the nearest dollar.)

Pay day loans are short term loans that you take out against future paychecks: The company advances you money against a future paycheck. Either visit a pay day loan company, or look one up online. Be forewarned that many companies do not make their fees obvious, so you might need to do some digging or look at several companies. Explain the general method by which the loan works.

Which of these statements is true? A)There is no reason to pay off a loan early B) when shopping for a loan, you need to compare only APRs C) the more you owe, the higher your interest payment will be D) you can save money by making the smallest down payment the lender will allow

Alice’s second initiative calls for Fresh & Fruity to obtain a bank loan of a sufficient size to enable the company to take all suppliers’ discounts. What is the minimum size of this loan? (Hint: To take all suppliers’ discounts, the average payment period must be 10 days, and net purchases will be purchases – (Purchases from Figure 1 x .02). Assume that all this happens, and solve the following formula for the new accounts payable balance, using:   Accounts payable = Average payment period x Purchase per day* *Based on net purchases/360.   Now compare the accounts payable you just solved with the new accounts payable balance you found in question 3. The difference is the size of the loan that is required. Assume that Fresh &Fruity does obtain an 8 percent loan for one year in the amount you solved in question 5, and it reduces its accounts payable balance accordingly. Now the company is taking 2 percent discounts on all purchases and paying 8 percent a year on the loan…

Suppose you are shopping for a mortgage and the lender presents you with a long menu of loan options. For each option, there is a discount point charged and an interest rate given. The amount of the point ranges anywhere from -1% to 3%. When would it be optimal for you select a loan with a point of 2%? (Assume there is no affordability constraint, ie: you have the money to buy whatever point you would like). If you have a very short holding period O Never O If you have a very long holding period O Only when the point is equal to the effective borrowing cost O Always

can you please show the step by step solution. please do not skip steps. Please try to refrain from using Excel

You are taking out a single-payment loan that uses the simple interest method to compute the finance charge. You need to figure out what your payment will be when the loan comes due. The equation to calculate the finance charge is: FsFs = Amount of Loanx   Interest Ratex   Term of Loan   where FsFs is the finance charge for the loan, and the term of the loan is in    .   You’re borrowing $10,000 for two years with a stated annual interest rate of 6%.

Watch the Mathematics of Finance video and then answer the question given below. Simple interest loans are generally used for which type of loan? Click here to watch the video. Choose the correct description of a simple interest loan. A. Home Mortgage loans B. Short term loans of less than a year C. Car loans D. Long term loans of a year or more

Please show all equations and work as needed. Make the correct answer clear. If possible, please type work so it can be copied. Thank you.

Explain in your own words the difference between the lender's yield and the effective borrowing cost. What are mortgage discount points?  When does it make sense to pay points on a loan?  How can a borrower make a decision? Find a web source where you can compare mortgage options.  Post a link here and discuss the clarity of information provided.

This is a loan problem with multiple parts please read and answer questions carefully.

Suppose that you have the capacity to pay, would you rather borrow a loan that is amortized monthly or one that is amotized quarterly? what are your considerations when availing a loan (qualitative or quantitative) discuss.

Consider a loan repayment plan described by the following initial value problem, where the amount borrowed is B(0) = $40,000, the monthly payments are $600, and B(t) is the unpaid balance of the loan. Use the initial value problem to answer parts a through c. B' (+) =0.03B - 600, B(0) = 40,000 a) Find the solution of the initial value problem and explain why B is an increasing solution. B(t) = Why is B an increasing function? O A. The function is increasing because it is an exponential function with a positive coefficient and a negative exponent. O B. The function is increasing because it is an exponential function with a positive coefficient and a positive exponent. O C. The function is increasing because it is an exponential function with a positive exponent. O D. The function is increasing because it is an exponential function with a positive coefficient. b) What is the most that you can borrow under the terms of this loan without going further into debt each month? The…

Describe payday loans, tax-refund advances and structured-settlement advances—the differences between these financing products and the concerns that are associated with similar short-term loan products. Specifically, explain the effect these can have on your future cashflow.

1)I need help with finance homework questions asap please. Multiple choice question. All else equal, when deciding between two loan offers the loan that should be accepted is the one: With the most frequent compounding period.   With the lowest annual percentage rate.   With the least frequent compounding period.   With the lowest stated interest rate.   With the lowest effective annual rate.

Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

If you were comparing the costs of loans from different lenders, could you use their APRs to determine the loan with the lowest effective interest rate?

Loan Amount Is $430,000 Loan is a 7/30 Balloon Loan Annual Interest is 3.75%, with monthly payments What Is the monthly payment for the loan? Enter as a positive number

What are the major flaws with NPV? What are the major flaws with IRR? If you are going to a bank and trying to get a loan, which is the best method to use (NPV, IRR, Payback period)?

What are three different things you can do to get a lower interest rate on your loan without changing your credit score?

7. Calculating finance charges using the discount method and APRon a single-payment loan You are taking out a single-payment loan that uses the discount method to compute the finance charges. Computing the finance charges is done      the way they’re computed using the simple interest method. Under the discount method, a borrower receives the principal      the finance charges. For example, if the principal is $8,000 and the finance charges are $720, the borrower will receive $    .   The following equation computes the finance charges on your loan: FdFd = FsFs = P     r      t   In the equation, FdFd is the finance charge for the loan. What are the other values? P is the      amount of the loan.   r is the stated      rate of interest.   t is the term of the loan in     .   You’re borrowing $6,000 for a year and a half with a stated annual interest rate of 6%. Complete the following table. (Note: Round your answers to the nearest dollar.) Principal…