8. Your company plans to borrow $12 million for 12 months, and your banker gives you a stated rate of 17 percent interest. Calculate the effective rate of interest for the following types of loans. a. Simple 17 percent interest with a compensating balance of 12 percent. (Use a 360-day year. Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest % b. Discounted interest (with no compensating balance). (Input your answer as percent rounded to 2 decimal places.) Effective rate of interest % c. An installment loan (12 payments). (Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest % d. Discounted interest with a compensating balance of 6 percent. (Use a 360-day year. Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest %
8. Your company plans to borrow $12 million for 12 months, and your banker gives you a stated rate of 17 percent interest. Calculate the effective rate of interest for the following types of loans. a. Simple 17 percent interest with a compensating balance of 12 percent. (Use a 360-day year. Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest % b. Discounted interest (with no compensating balance). (Input your answer as percent rounded to 2 decimal places.) Effective rate of interest % c. An installment loan (12 payments). (Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest % d. Discounted interest with a compensating balance of 6 percent. (Use a 360-day year. Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest %
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
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Transcribed Image Text:8. Your company plans to borrow $12 million for 12 months, and your banker gives you a
stated rate of 17 percent interest.
Calculate the effective rate of interest for the following types of loans.
a. Simple 17 percent interest with a compensating balance of 12 percent. (Use a 360-day
year. Input your answer as a percent rounded to 2 decimal places.)
Effective rate of interest
b. Discounted interest (with no compensating balance). (Input your answer as percent
rounded to 2 decimal places.)
Effective rate of interest
%
c. An installment loan (12 payments). (Input your answer as a percent rounded to 2
decimal places.)
Effective rate of interest
%
d. Discounted interest with a compensating balance of 6 percent. (Use a 360-day year. Input
your answer as a percent rounded to 2 decimal places.)
Effective rate of interest
%
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