A firm charges its credit customers 1.67% interest per month. What is the effective interest rate?

Q: Suppose your credit card issuer states that it charges a 24.00% nominal annual rate, but you must…

A: Effective Annual Rate(EAR) = [(1+ nominal rate/n)^n]-1 where, n = compounding period

Q: Suppose you have a credit card with a balance of $3295.89 that charges 19.85% APR on unpaid…

A: Credit cards are used very often now days and credit cards are used for short term credits.Balance…

Q: (a) Suppose a credit card company charges a monthly interest rate of 1.8%. What APR must the company…

A: APR stands for annual percentage rate. It is the rate at which the lender charges the borrower.…

Q: The nominal interest rate on a loan is 12.5% and inflation is 3%. What is the real interest rate?

A: Information Provided: Nominal Rate = 12.5% Inflation = 3%

Q: A person borrows $3,000 on a bank credit card at a nominal rate of 18% per year, which is actually…

A: Annual Percentage Rate It  the total  interest paid  each year which is before consideration for the…

Q: How many months will it take to pay off a credit card debt of $4,000 by paying $250 per month at an…

A: Using NPER function in excel

Q: A credit card company charges 23.0% interest per year, compounded monthly. What effective annual…

A: The effective annual rate refers to the rate of return provided by the investment over a year…

Q: To payoff a loan of $1000 you need to make 40 payment of $36.56 per month. What rate of interest are…

A: Annual percentage rate refers to the interest rate paid by the borrower to the lender on a yearly…

Q: You've worked out a line of credit arrangement that allows you to borrow up to $70 million at any…

A: I have provided a detailed answer in the Explanation section.Explanation:Let's break down the…

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: a. What is the effective annual interest rate on this lending arrangement? Note: Do not round…

A: a)Monthly Interest = amount borrowed * Interest rate                          = 70,000,000 * 0.375%…

Q: annual interest rate on a credit card is 24.99%. If a payment of $100.00 is made each month, how…

A: We need to use NPER function in excel to calculate time to payoff loan. The formula is:…

Q: How long would

A: Given information : Repayment amount  $      25.00 Interest rate 19% Loan amount  $2,000.00…

Q: A payday loan company charges a $25 fee for a $550 payday loan that will be repaid in 14 days using…

A: Interest Amount = Principal * Rate * Time

Q: Suppose your credit card issuer states that it charges a 17.00% nominal annual rate, but you must…

A: When the borrower borrows a loan from the lender, he has to pay a rate of interest on the borrowed…

Q: 7. If the Nominal or Headline Annual Rate of a credit card that charges interest daily is 25%, what…

A: The annual equivalent rate refers to the interest rate of a loan or a financial product that derives…

Q: Which bank would you prefer to borrow from?

A: Information Provided: Bank Z interest rate = 5% compounded monthly Bank Y interest rate = 4.75%…

Q: ts, which amounts to monthly compounding. What is the effective annual rate?   a. 24.23%

A: Investors and consumers can compare interest rates across a range of financial products with…

Q: A bank quotes you a nominal interest rate of 12%, compounded monthly, on a savings account. What is…

A: Monthly nominal interest rate (r) = 0.01 (i.e. 0.12 / 12)Number of compounding in a year (n) = 12…

Q: hat is the effective interest rate of a simple discount note for $27,500​,at an ordinary bank…

A: Effective Interest Rate -The rate used to compute the real return on investment and interest rate…

Q: Calculate the finance charge for a credit card that has the given average daily balance and interest…

A: The finance charges are the charges that credit card company collects from customers on the amount…

Q: Calculate the finance charge for a credit card that has the given average daily balance and interest…

A: Credit card finance charges or interest is the charge that credit card companies impose on the card…

Q: What is the effective interest rate of a simple discount note for $31,200, at an ordinary bank…

A: Introduction: The effective interest rate is the loan usage rate that a borrower pays. It is also…

Q: A bank wishes to earn a 17% simple interest in discounting notes. If the term of the discount is 3…

A: Simple Interest: When the interest on the borrowed amount is computed on the principal at the loan…

Q: you sign a discount note for $9,500 at a bank discount rate of 9% for 3 months, what is the…

A: A discount note is a short-term debt obligation issued by highly-rated corporations or…

Q: 5) According to a recent WalletHub report, the average credit card balance is $10,848 per American…

A: Credit card:A credit card is a financial tool that enables individuals to make purchases on credit,…

Q: A commercial bank offers you a credit card with an annual percentage rate APR = 9%, compounding…

A: Annual Percentage rate = APR = 9%Compound = n = Monthly = 12

Q: ) If you make no payments and no additional purchases for one year, what will be the amount owed at…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: The York Company has arranged a line of credit that allows it to borrow up to $45 milion at any…

A: Compound = n = Monthly = 12Monthly Interest Rate = r = 0.621%

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.