2. A manager of a small company secured a $45,000 to buy a new truck that is to be delivered in 61 days. He thought it would be wise to invest this amount in a principal-safe account that yields 8.75% interest, with a brokerage fee of $80? How much would he gain if he did?

2. A manager of a small company secured a $45,000 to buy a new truck that is to be delivered in 61 days. He thought it would be wise to invest this amount in a principal-safe account that yields 8.75% interest, with a brokerage fee of $80? How much would he gain if he did?

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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2. A manager of a small company secured a $45,000 to buy a new truck that is to be delivered in
61 days. He thought it would be wise to invest this amount in a principal-safe account that yields
8.75% interest, with a brokerage fee of $80? How much would he gain if he did?

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You are the owner of four Taco Bell restaurant locations. You have a business loan with Citizens Bank taken out 60 days ago that is due in 90 days. The amount of the loan is $50,000, and the rate is 9.5% using ordinary interest. You currently have some excess cash: $35,000. Due to situations beyond your control, you, as the owner, must make an immediate business decision now to pursue only one of these two choices:1) sending all of the $35,000 to Citizens Bank as a partial payment on your loan, or2) using the $35,000 to purchase serving supplies such as food containers, cups, and plastic dinnerware for your inventory. This is the last day to take advantage of the opportunity to save some money due to a special discount price that is "10% off" the normal cost of $35,000 for these items. Consider these calculations: (a) How much interest (in $) will you save on this loan if you make the partial payment and don't purchase the additional serving supplies? (Round your answer to two…
The manger of a technology store wants to save $40,000 in 3 years to make a down payment on a condominium. How much (in dollars) does the manager need to invest at the beginning of each week into an account that earns 9.75% interest compounded weekly? Round your answer to the nearest cent.)
An investor is looking for a loan for an investment property that he has found. He can afford a monthly payment of $1,475. The interest rated quoted to him was 7.25%. He built the following table from that information. A $74,049 $125,638 $161,580 t 5 10 15 a) A(5) = b) If the investment property cost $161,580, how many years must the investor make monthly payments? t 20 25 30 A $186,620 $204,066 $216,220
You just borrowed $15,000 from a finance company to start a business. If you are required to repay $16,800 interest and principal in one year, what is the nominal interest rate that the finance company is charging? If inflation is 2.5%, what is the expected real rate of interest?
You are the accounting manager for Kool Ragz, Inc., a manufacturer of men's and women's clothing. The company needs to borrow $1,500,000 for 90 days in order to purchase a large quantity of material at "closeout" prices. The interest rate for such loans at your bank, Rimrock Bank, is 15% using ordinary interest. (a) What is the amount (in $) of interest on this loan? (b) After making a few "shopping" calls, you find that Southside National Bank will lend at 15% using exact interest. What is the amount (in $) of interest on this offer? (Round your answer to two decimal places.) (c) So that it can keep your business, Rimrock Bank has offered a loan at 14.5% using ordinary interest. What is the amount (in $) of interest on this offer? (d) (Challenge) If Southside National wants to compete with Rimrock's last offer (part c) by charging $1,375 less interest, what rate (as a %), rounded to the nearest hundredths of a percent, must it quote using exact interest?

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