A company has a collection period of 37 days and factors all receivables immediately at a discount of 2.7 percent. What is the effective annual cost of borrowing? Assume 365 days per year.

Q: suppose that $47,700 is invested in certificate of deposit for 3 years at 6.2% annual interest to be…

A: The deposit facility provided by commercial banks in which the deposited amount is repaid only at…

Q: A loan is taken out at j12 = 18% and is paid back with monthly payments of $279.00, plus a smaller…

A: Annual interest rate j12 = 18% (i.e compounding monthly)henceMonthly interest rate = 18% / 12 =…

Q: The Men's Store charges 1.25 percent interest per month. What is the effective annual rate?

A: Every business firm suffers from the scarcity of funds. There are several investment…

Q: A company borrowed $100,000 from a local bank. The loan requires 10 equal annual payments beginning…

A: An annuity is a succession of payments used to cover or reimburse a one-time expenditure. Using the…

Q: pays a 9.75% nominal rate on deposits, with monthly compounding. What effective annual rate (EFF%)…

A: The effective annual rate can be computed as follows :- EAR = (1+i / x)^x - 1  = (1 + 0.0975/12)^12…

Q: you obtained a $10000 loan at 1.5% compunded monthly. how much more interest will you pay in the…

A: Data given: Loan amount=$10,000 Rate=1.5% (compounded monthly) Required: how much more interest will…

Q: Only by formula or skip pls .If a​ firm's cost of capital is​ 15%, then an investment project that…

A: Net Present Value (NPV) is a discounted capital budgeting technique. If NPV of a project is positive…

Q: Suppose that a company borrows 20,000 for 1 year at a stated rate of interest of 9 percent. What is…

A: Annual percentage rate (APR) if interest is paid to the lender annually = (1 + Stated rate / Number…

Q: FIND THE ERRORS AND PUT THE ADJUSTMENTS IN THE TEXT RESPONSE OF THIS ASSIGNMENT EXAMPLE: THE…

A: Date Purchase Credit Card Statement Claire's recorded Transactions Mar-05 Riley's Candies 165.83…

Q: If a loan is made at 9.24% compounded quarterly, what loan today could be paid off by making 45…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: What payment is required to pay off a loan of $ 2,550.00 at 6.9% sixteen months later?

A: Future value is the amount we get on the investment at a particular rate of return.. In this case,…

Q: BALR Corp.borrows $600,000 to be paid off in three years. The loan payments are semiannual with the…

A: Loan payments are semiannual. Thus, the semiannual interest rate should be considered i.e. 6%/2=3%.…

Q: 4) Monthly payments are required on a $35,000 loan at 6.0% compounded monthly. The loan has an…

A: Monthly payment refers to an amount that is paid every month for the repayment of loan amount…

Q: What will be the total interest earned on a 6%, $2,000 note receivable that is due in nine months?

A: Accounts receivable: Accounts receivable refers to the amounts to be received within a short period…

Q: Compute the monthly payment on a $65,000 loan if the principal and interest are to be repaid in 84…

A: Monthly payments could be computed by using the present value formula. Present value of all the…

Q: A department store charges 1.5% interest per month, compounded continuously, on its customers’…

A: The real interest that an investor earns on the investment and a borrower pays on loan after…

Q: The interest rate on a $118,000 loan is 8.9% compounded semiannually. The monthly payments on the…

A: a) To calculate the interest component of Payment 210, we first need to find the balance of the loan…

Q: Please answer with details on how to do it. Thank you.  A company borrows $ 100,000 today at 6 %…

A: Annuities seem to be interest-bearing financial products that offer a steady steady flow of income…

Q: A firm sells its accounts receivables to a factor at a 3.5% discount. The average collection period…

A: Average collection period = 3 months Discount = 3.5% Receivables Turnover = 12months / Average…

Q: Van Buren Resources Inc. is considering borrowing $100,000 for 202 days from its bank. Van Buren…

A: Given:Borrowing amount=$1000000 for 202 daysPayable amount $3000 of interest at maturityRepaid…

Q: What is the amount of each payment if Plascote Industries borrows $32,600, at  an annual interest of…

A: for calculating amount to be paid for each installment we use PMT function in excel to determine the…

Q: A 44 month loan has monthly payments of $412. If the interest rate is 8.1%, compounded monthly, find…

A:

Q: nth. Round all values to the nearest cent. A. What is the finance charge for this first month? B.…

A: finance fee is the interest  pay on a loan you owe,If you carry a debt from one payment month to…

Q: XYZ Bank pays simple interest of 2% with quarterly compounding for deposits in their savings…

A: LIFO method is also called Last -In first out method. Under this method money that is deposited at a…

Q: A loan, amortized over 15 years, is repaid by making payments of $1,900 at the end of every month.…

A: Principal payment refers to the amount of loan that is paid back by the borrower. The loan amount is…

Q: (a) How many payments are needed to repay the debt? (b) What is the size of the final payment?

A: First we need to determine the equivalent interest rate as the compounding rate and period are…

Q: A business received a for year $2,000,000 loan at an interest rate of 7% per year. The principal is…

A: NPV means PV of amount which is receive or pay in future. NPV can be find by using discounting rate…

Q: Find the payment necessary to amortize a 4% loan of $900 compounded quarterly, with 15 quarterly…

A: Quarterly compounding is a form of compounding in which interest is earned every quarter and such…

Q: How much total principal is repaid between the 1st and 7th payment interval of a 4.5-year loan for…

A: Here, Time Period of Loan is 4.5 years Loan Amount (PV) is $4,887 Interest Rate on Loan is 7.4%…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.