10. A payday loan business in town charges $3 interest per two week on a $200 loan. The effective interest rate onthis loan isA. 39% B. 47.27% C.52.1% D. None of those11. Consider the cash flows in the table bolow:Year01234$805$140Cash Flow $100$50$60$70Which one of the following is correct for this cash flow (circle)?A. 100 50+ 10(A/G, i, 5) +50(P/F, 4, 5)B. (50(P/A, 4, 5)+10(P/G, 4, 5)+50(P/F, i, 5))/(100)=1C. 100(P/A, 1, 5)=50+10(A/G, i, 5)D. None of the equations are correct.12. A series of end-of-the-year cash flows of $2,000 for ten years at an annual interest rate of 8% is nearly equalto a series of end-of-the-year cash flows at 10% interest for eight years. Determine the value of the uniformamount, A (circle)A. $1,678B. $2,515C.$1,590 D. None of those

Effective Annual Rate: The effective annual rate of interest is the actual or the real rate of…

Answered: 10. A payday loan business in town…

10. A payday loan business in town charges $3 interest per two week on a $200 loan. The effective interest rate on this loan is A. 39% B. 47.27% C.52.1% D. None of these

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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am. 113.
A car dealer offers payments of $325 per month for 72 months on a $32,000 purchase of a car, but you put down a $2,000 downpayment. What is the loan's APR? a. b. d. 11.98% 7.72% 9.00% 7.84%
Use the exact interest method (365 days) and the ordinary interest method (360 days) to compare the amount of interest for the following loan. Round your answers to the nearest cent. Principal Rate (%) Time (days) Exact Interest Ordinary Interest $ $136,000 7.30 64 1,741 1,765
A bank makes a loan of $1,000,000 at a rate of 6% p.a. It also requires a compensating balance of 5%. What is the effective cost to the borrower?
Loans that are used to fill a gap in the time until a specific event occurs are called a. evergreen facilities b. bridge loans. c. term loans d. floor plans. If a bank has gross charge-offs of $25 for the current year, recoveries of $40, and provision for loan losses of $30, how much will the reserve for loan losses change? a. $45 b. $+15 c. none of the above. d. $-15 Which of the following is a non-installment loans? There may be more than one correct answer. a. term loan b. single payment loans c. bridge-loans d. closed-end leases The _____ ratio gives actual losses on loans, while the ______ ratio gives the extent to which the bank’s assets are devoted to loans. a. loss rate; capitalization b. loss rate; loan risk c. loan risk; loss rate d. operating efficiency; loan risk
XYZ plans to open a new store with the following forecasted free cash flows. If the interest rate is 8% and cash flows are expected to grow by 2% a year starting year 4, calculate project’s NPV 0 1 2 3 CF, mil. -50 35 55 85 -$1.5 million $1,386.9 million $1,589.1 million $1,244.1 million
4. Interest Rate Oliver has the following outstanding balances: Balance ($) Form of Credit Bank Loan Credit Card A Credit Card B a. 6686.98 765.39 1028.14 7.2% compounded monthly 20.99% compounded daily 17.5% compounded daily Monthly Payment $300 Minimum payment of $50 Minimum payment of $30 Length to Pay off Use the last column to determine how long it will take for Oliver to pay of each balance if he pays the (minimum) monthly payment. Show relevant calculations below. b. Suppose Oliver consolidates his loan and credit card balance by using a line of credit to pay off each debt. The line of credit has an interest rate of 7.5%, compounded monthly. If Oliver makes payments of $380, how long will it take to be debt free? c. How much interest would he save by consolidating his debt?
None
Some lenders offer loans with biweekly payments rather than monthly payments. Investigate the effect of this on home loans by finding the payment and total interest on a thirty-year simple interest amortized loan of $150,000 at 13% interest. (Round your answers to the nearest cent.) (a) if payments are made monthly payment $ total interest $ (b) if payments are made biweekly payment $ total interest $
please answer within the format by providing formula the detailed workingPlease provide answer in text (Without image)Please provide answer in text (Without image)Please provide answer in text (Without image)
Enter your dollar answers rounded to the nearest two cents and precede numbers that are less than zero (0) with a minus sign (–).) Buy On Time or Pay Cash Cost of Borrowing 1. Terms of the loan a. Amount of the loan $10,000.00 b. Length of the loan (in years) 5 c. Monthly payment $188.70 2. Total loan payments made ($ per month months) $ 3. Less: Principal amount of the loan $ 4. Total interest paid over life of loan $ 5. Tax considerations: – Is this a home equity loan? no – Do you itemize deductions on your federal tax return? yes 6. What federal tax bracket are you in? 35% 7. Taxes saved due to interest deductions ($ x %) $ 8. Total after-tax interest cost on the loan $ Cost of Paying Cash 9. Annual interest earned on savings (6% x ) $ 10. Annual after-tax interest earnings ($ x %) $ 11. Total after-tax interest earnings…
10.4 Allocation of the Monthly Payment (pp. 584-387) Compute (a) the allocation of the monthly payment toward principal and interest and (b) the new principal. Rowena Tinley obtains a 30-year, $90,000 mortgage from State Bank. The interest rate is 7.5%, and her monthly payment is $629.10. For the first payment, what is the amount of (a) interest, (b) payment to principal, and (c) new principal? Step 1: Find the interest. Principal x Rate x Time $90,000.00 x 7.5% x 12 = $562.50 interest Step 2: Find the payment to principal. Monthly Payment Interest $629.10 $562.50 - $66.60 payment to principal Step 3: Find the new principal. Previous Balance - Payment to Principal $90,000.00 $66.60 = $89,933.40 new principal Review Exercises Find the (a) amount for interest, (b) amount for principal, and (c) new principal. Interest First Monthly Amount for Payment Amount for Mortgage Amount New Principal b. $ Principal C.S Rate Interest 26. $ 60,000 7.0% $399.00 a. S 27. 130,000 5.5 738.40 a. b. 28.…

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