8Brampton Truck Parts needs $652,000 to take a cash discount of 2.50/10, net 70. A banker will loan the money for 60 days at aninterest cost of $14,100.a. What is the annual rate on the bank loan? (Use 365 days in a year. Do not round intermediate calculations. Round the finalanswer to 2 decimal places.)Annual rateb. How much would it cost (in percentage terms) if Brampton did not take the cash discount and paid the bill in 70 days instead of 10days? (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to 2 decimal places.)Cost of not taking a cash discountc. Should Burt's borrow the money to take the discount?YesNo%d. If the banker requires a 10 percent compensating balance, how much must Burt's borrow to end up with the $652,000? (Round thefinal answer to the nearest whole dollar.)Amount to be borrowed$Annual rate%e-1. What would be the interest rate in part d if the interest charge for 60 days were $25,000? (Use 365 days in a year. Do not roundintermediate calculations. Round the final answer to 2 decimal places.)%e-2. Should Brampton borrow with the 10 percent compensating balance? (There are no funds to count against the compensatingbalance requirement.)

1. Loan Amount Needed: $652,0002. Cash Discount: 2.50%3. Discount Period: 10 days4. Credit Terms:…

Answered: 8 Brampton Truck Parts needs $652,000…

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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a. Use a two-way data table to show the impact of down payment amounts ranging from $1,000 to $5,000 with $1,000 increments and annual interest rates ranging from 4% to 7% with 0.5% increments on the monthly payment of a five-year loan for a Honda Civic LX. which costs $19.980. What is the monthly payment for the loan with a $4,000 down payment and 6% interest rate? Note: Round your answer to 2 decimal places. Monthly payment amount $ Interest rate. 363 70 b-1. If Jared can afford a car payment of $350 a month, what does the annual interest rate need to be in order to afford the AWD Jeep Wrangler, which costs $31,795, using a five-year auto loan with a $3,000 down payment? (Report in percentage) Note: Round your answer to 2 decimal places. 12:00 % b-2. What should the down payment be if the five-year auto loan carries an annual interest rate of 5.5%?
You are looking at a one-year loan of $10,000. The interest rate on a one-year loan is quoted as 13 percent plus 3 points. What is the EAR? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Effective annual rate Is your answer affected by the loan amount? O Affected 16.79 % Not affected
Bank A offers you a loan at 5.76% compounded 2 times a year. Bank B offers to loan you the same amount at 0.10% less than the rate offered by Bank A but compounded twice as often as the Bank A rate is. Which bank's loan should you accept? As your answer, enter the effective rate (in percent, to two decimal places at least) offered by the bank whose loan you should accept.
a. If you take out an $7,900 car loan that calls for 60 monthly payments starting after 1 month at an APR of 12%, what is your monthly payment? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Monthly payment b. What is the effective annual interest rate on the loan? (Do not round intermediate calculations. Round your answer to2 decimal places.) Effective annual interest rate %24
How to calculate the missing values?
Neveready Flashlights Inc. needs $340,000 to take a cash discount of 3/17, net 72. A banker will lend the money for 55 days at an interest cost of $10,400. What is the effective rate on the bank loan? tion in mind. 20.04% 3.06% 4.25% 10% How much would it cost (in percentage terms) if the firm did not take the cash discount, but paid the bill in 72 days instead of 17 days? 3.0% 97% 6.55% 15% Should the firm borrow the money to take the discount? No Yes I don't know Sometimes If the banker requires a 20 percent compensating balance, how much must the firm borrow to end up with the $340,000? $10,000 $1,000 $100,000 ○ $425,000 What would be the effective interest rate in part d if the interest charge for 55 days were $13,000? Should the firm borrow with the 20 percent compensating balance? (The firm has no funds to count against the compensating balance requirement.) 3.0% 6.55% 6.0% 5.0%
Question 3. Attached is a similar question with answers
19.
What is the approximate annual cost of foregoing the cash discount if the credit term is 2/15, net 40 and the company pays end of 50 days? Use 360 days a year. Group of answer choices 28.80 percent 29.39 percent 20.57 percent 20.99 percent
Bank A offers you a loan at 8.52% compounded 5 times a year. Bank B offers to loan you the same amount at 0.10% less than the rate offered by Bank A but compounded twice as often as the Bank A rate is. Which bank's loan should you accept? As your answer, enter the effective rate (in percent, to two decimal places at least) offered by the bank whose loan you should accept.
A bank offers a home buyer a 25-year loan at 7% per year. If the home buyer borrows $150,000 from the bank, how much must be repaid every year? A. $15,445.90 B. $12,871.58 C. $20,594.53 D. $18,020.21
Cost of Bank Loans A). Del Hawley, owner of Hawley’s Hardware, is negotiating with First City Bank for a 1-year loan of $100,000. First City has offered Hawley the alternatives listed below. Calculate the effective annual interest rate for each alternative. Do not round intermediate calculations. Round your answers to two decimal places. A 8.75% annual rate on a discounted loan, with a 15% compensating balance. % Interest figured as 8% of the $100,000 amount, payable at the end of the year, but with the loan amount repayable in monthly installments during the year. % B). Gifts Galore Inc. borrowed $1.5 million from National City Bank. The loan was made at a simple annual interest rate of 9% a year for 3 months. A 15% compensating balance requirement raised the effective interest rate. Do not round intermediate calculations. Round your answers to two decimal places. The nominal annual rate on the loan was 11.25%. What is the true effective rate? %

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