A payday loan is structured to obscure the true interest rate you are paying. For example, in Washington, you pay a $35 "fee" for a two-week $205 payday loan (when you repay the loan, you pay $240). What is the effective annual interest rate for this loan? (Assume 26 bi-weekly periods per year.) The effective annual interest rate is%. (Round two decimal places.)

A payday loan is structured to obscure the true interest rate you are paying. For example, in Washington, you pay a $35 "fee" for a two-week $205 payday loan (when you repay the loan, you pay $240). What is the effective annual interest rate for this loan? (Assume 26 bi-weekly periods per year.) The effective annual interest rate is%. (Round two decimal places.)

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 loan of $1420 taken out on June 7 requires three payments. The first payment is due on July 7. The second payment is twice as large as the first payment and is due on August 19. The final payment, due on November 2, is three times as large as the first payment. If the focal date is June 7, what is the size of each of the three payments at an interest rate of 4.9%? The first payment is $ the second payment is $, and the third payment is $ (Round the final answers to the nearest cent as needed. Round all intermediate values to sx decimal places as needed)
Yoo, Incorporated, has arranged a line of credit that allows it to borrow up to $51 million at any time. The interest rate is 627 percent per month. Additionally, the company must deposit 5 percent of the amount borrowed in a noninterest-bearing account. The bank uses compound interest on its line-of-credit loans. If the company needs $27 million for 8 months, how much will it pay in interest? Multiple Choice $1.307,50417 $1,457,29019 $1619,200.22 $1.230.592.16) $1,384,41618
One bank offers to loan you money at an interest rate of 12% compounded quarterly, and another bank offers to loan you money at 11.8% compounded continuously. Which loan would you prefer, and why?
Today, you borrowed $5,400 on a credit card that charges an interest rate of 14.2 percent, compounded monthly. How long will it take you to pay off this debt assuming that you do not charge anything else and make regular monthly payments of $110?
Some lenders offer loans with biweekly payments rather than monthly payments. Investigate the effect of this on home loans by finding the payment and total interest on a thirty-year simple interest amortized loan of $150,000 at 13% interest. (Round your answers to the nearest cent.) (a) if payments are made monthly payment $ total interest $ (b) if payments are made biweekly payment $ total interest $
Find the APR of the loan given the amount of the loan, the number and type of payments, and the add-on interest rate. Loan amount, $9,000; three yearly payments; rate = 8% The annual percentage rate is%. (Type an integer or a decimal.)
. Calculating EAR First National Bank charges 11.4 percent compounded monthly on its business loans. First United Bank charges 11.6 percent compounded semiannually. As a potential borrower, to which bank would you go for a new loan ?
To borrow $2,400, you are offered an add-on interest loan at 10.4 percent with 12 monthly payments. Compute the 12 equal payments. Use the amount you borrowed and the monthly payments you computed to calculate the APR of the loan. Then, use that APR to compute the EAR of the loan. Note: Do not round intermediate calculations and round your final answer to 2 decimal places. Equal payment Effective annual rate. %
A credit card quotes a rate as 21.5% compounded monthly. a) What is the effective annual interest rate? b) What would the effective annual interest rate be with daily compounding (assume the 360 day convention)?
The rate quoted by Big Bank on a car loan is 8 percent. The annual rate of inflation is currently 1.5 percent. What is the approximate real interest rate paid by the consumer on this loan?
You have an unpaid balance of $100 on a credit card and plan to pay off the balance in 12 months. Your credit card company charges you 9% interest per year. You transfer the balance to a card that charges only 7% per year and plan to pay off the balance in 6 months. Use the table in Figure 25.1 to calculate the difference in the total charge for interest.
The loan below was paid in full before its due date: (a). Obtain the value of h from the annual percentage rate table. Then (b) use the actuarial method to find the amount of unearned interest, and (c) find the payoff amount. Regular Monthly Payment $494.14 APR 4.0% Remaining Number of Scheduled Payments after Payo!! 12 Click the icon to view the annual percentage rate table. (b) The unearned interest is (Round to the nearest cent as needed) (c) The payoff amount is $(Round to the nearest cent as needed)

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