5. Janet and Mercy want to borrow $50,000 for 120 days to finance their business. Security Bank charges 11% exact interest while State Savings and Loan charges 12.5% ordinary interest. 5a) What is the maturity value at Security Bank? 5a) What is the maturity value at State Savings and Loan? 5c) Which is the better buy 6. Bank A charges ordinary interest, while bank B charges exact interest. Susan Carsten wants to borrow $11,000 for 90 days at 9%. 6a) How much interest is charged at bank A? 6a) How much interest is charged at bank B? 6c) Which bank offers a better deal? 7. George Duda has an option to lend $5,000 at 10% interest for 120 days. 7a) If he charges ordinary interest, how much will he earn? 7b) If he charges exact interest, how much will he earn?
5. Janet and Mercy want to borrow $50,000 for 120 days to finance their business. Security Bank charges 11% exact interest while State Savings and Loan charges 12.5% ordinary interest. 5a) What is the maturity value at Security Bank? 5a) What is the maturity value at State Savings and Loan? 5c) Which is the better buy 6. Bank A charges ordinary interest, while bank B charges exact interest. Susan Carsten wants to borrow $11,000 for 90 days at 9%. 6a) How much interest is charged at bank A? 6a) How much interest is charged at bank B? 6c) Which bank offers a better deal? 7. George Duda has an option to lend $5,000 at 10% interest for 120 days. 7a) If he charges ordinary interest, how much will he earn? 7b) If he charges exact interest, how much will he earn?
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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Transcribed Image Text:5. Janet and Mercy want to borrow $50,000 for 120 days to finance their business. Security
Bank charges 11% exact interest while State Savings and Loan charges 12.5% ordinary
interest.
5a) What is the maturity value at Security Bank?
5a) What is the maturity value at State Savings and Loan?
5c) Which is the better buy
6. Bank A charges ordinary interest, while bank B charges exact interest. Susan Carsten wants
to borrow $11,000 for 90 days at 9%.
6a) How much interest is charged at bank A?
6a) How much interest is charged at bank B?
6c) Which bank offers a better deal?
7. George Duda has an option to lend $5,000 at 10% interest for 120 days.
7a) If he charges ordinary interest, how much will he earn?
7b) If he charges exact interest, how much will he earn?
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