A firm offers terms 3/15, net/60. Calculate the Annual Percentag Annual Percentage Rate (APY) is for each of the scenario below if: a) Discount is changed by 4 percent. b) Credit period is decreased to 45 days. c) New APR of the firm if the discount period is increased by 5 days.

Q: A $2,500 loan is offered for 27 months at 5.2% compounded annually. maturity value? Refer to the…

A: Loan = $2500Interest rate = 5.2% compounded annuallyPeriod = 27 months or 2.25 year

Q: A company has a collection period of 36 days and factors all receivables immediately at a discount…

A: Discount rate = 2.6%Number of days in a year = 365 daysCollection period = 36 days

Q: Explain the meaning of a 20% annual percentage rate (APR) quotedby the credit c.ird company? And how…

A: Answer: Annual percentage rate (APR) applies to the interest rate charged annually to borrowers and…

Q: You Answered orrect Answer A one-year floating-rate note pays 6-month Libor plus 119 bps. The…

A: The information given is as follows:Time to maturity= 1 year6-Month Libor= 1.78%Quoted margin= 119…

Q: Your business requests a 3-month loan for 50,000. What will be the interest paid at the end of the…

A: The amount of interest paid is calculated as shown below.

Q: Chase Bank offers your firm a discount interest loan at 9 percent for up to $33 million and, in…

A: Effective annual interest rate is the rate that you actually pay over the money received.Effective…

Q: Compare the monthly payment and total payment for the following pair of $180,000 loan options.…

A: An annuity is a stream of fixed cash flows that occur at regular intervals.The periodic payments on…

Q: If a 6-month T-Bill with a face value of $100 is purchased at a 8% annual discount, the buyer will…

A: Given information in question 6 month T bill Value at maturity = $100 Discount rate annual = 8%…

Q: Consider two loans with one-year maturities and id and a(n) 8.4% loan with a 4.5% (no-interest) comp…

A: Effective annual rate refers to the interest rate that is being charged by the lender to the…

Q: Your bank is offering a term deposit that will earn investors an EAR of 10.70%. Your manager asks…

A: EAR stands for the effective annual rate. It is the rate which takes into consideration the impact…

Q: ETS offers 5-year CDs at 7.63% compounded quarterly and BOS offers a 5-year CD at a rate of 7.59%…

A: The calculation is:

Q: A loan is offered with monthly payments and a 11.75 percent APR. What's the loan's effective annual…

A: Annual rate (r) =11.75%Number of compounding (n) = 12Required:EAR = ?

Q: Calculate the APR of a loan for $9,875, including loan fees of $250, at 11.5% for 4 years. (Do not…

A: Data given: Loan amount=$9875 Rate=11.5% nper=4   Required: APR

Q: A firm obtained a floating rate loan at 7% when prime rate is at 6%. Calculate the interest rate the…

A: Prime rate is the rate of interest which is charged by the commercial banks from most trusted…

Q: For each of the following cases, indicate (a) what interest rate columns and (b) what number of…

A: The phrase "annual rate" means the interest rate or percentage that is applied to a loan, borrowing…

Q: A one-year floating-rate note pays 6-month Libor plus 90 bps. The floater is priced at 98.67 per 100…

A: Given:6-month LIBOR: 1.17%Coupon spread: 90 basis points (bps)Market price: 98.67% of par value

Q: A loan is offered with monthly payments and a 8.00 percent APR. What's the loan's effective annual…

A: We need to use effective annual rate formula below.Effective annual rate (EAR) = Wherer= annual…

Q: (Annual percentage yield) Compute the cost of the following trade credit terms using the compounding…

A: APR (r)=Discount % / (100-Discount%) * 360/(Net days - Discount days)n= 360/(Net days - Discount…

Q: The nominal interest rate compounded quarterly, ; (4) is 6%. Let i be the annual effective interest…

A: The cost of borrowing money or the return on investment represented as a percentage of the principal…

Q: On January 1, a company agrees to pay $26,000 in seven years. If the annual interest rate is 6%,…

A: Present value means the present value of the money which is to be payable or receivable in the…

Q: onsider a loan at 4.125% APR on 6 years for a $23,000 car a. Estimate the monthly payment (using…

A: Equated Monthly Installments are one part of the equally divided monthly outgoes to clear off an…

Q: You are considering an investment account with one of the advertised commercial deposits from…

A: The appropriate interest rate pertaining to a loan or investment is shown by the effective yearly…

Q: The discount rate on a T-Bill is always a simple annual interest rate, using the formula, D= PVrt…

A: Treasury bills are the debt instruments issued by the Government for a short period generally for…

Q: Your bank is offering you an account that will pay 25% interest (an effective two-year rate) in…

A: The equivalent discount rate is the interest rate that discounts future cash flows to their present…

Q: consider account APR of 4.6% find  APY and daily compounding. Comment on how changing the…

A: APR and APY are two important concepts with reference to the interest rate. APR shows number of…

Q: The monthly effective rate of discount is 0.7% . Calculate the force of interest per annum which is…

A: For a monthly rate, to find the annual force of interest, we compound the monthly force of interest…

Q: An annual percentage rate (APR) is determined by annualizing the rate using compound interest.…

A: As the question contains multiple question , I will be solving only 1st 3 questions. For remaining…

Q: Annual percentage yield) Compute the cost of the following trade credit terms using the compounding…

A: APR means the annual percentage rate, which represents both the interest rate on the loan as well as…

Q: ETS offers 6-year CDs at 8.63% compounded quarterly and BOs offers a 6-year CD at a rate 8.59%…

A: We use the annual yield (ay) formula: Where, r = rate of interest n= no. of compounding periods…

Receivables Management