Cost of Bank Loans Del Hawley, owner of Hawley's Hardware, is negotiating with First City Bank for a 1-year loan of $65,000. First City has offered Hawley the alternatives listed below. Calculate the effective annual nterest rate for each alternative. Do not round intermediate calculations. Round your answers to two decimal places. a. A 14% annual rate on a simple interest loan, with no compensating balance required and interest due at the end of the year. 14 b. A 10% annual rate on a simple interest loan, with a 20% compensating balance required and interest due at the end of the year. 12.5 c. An 8% annual rate on a discounted loan, with a 15% compensating balance. 9.41 % 9.38 % d. Interest figured as 9% of the $65,000 amount, payable at the end of the year, but with the loan amount repayable in monthly installments during the year. Alternative A V % % Which alternative has the lowest effective annual interest rate?

Cost of Bank Loans Del Hawley, owner of Hawley's Hardware, is negotiating with First City Bank for a 1-year loan of $65,000. First City has offered Hawley the alternatives listed below. Calculate the effective annual nterest rate for each alternative. Do not round intermediate calculations. Round your answers to two decimal places. a. A 14% annual rate on a simple interest loan, with no compensating balance required and interest due at the end of the year. 14 b. A 10% annual rate on a simple interest loan, with a 20% compensating balance required and interest due at the end of the year. 12.5 c. An 8% annual rate on a discounted loan, with a 15% compensating balance. 9.41 % 9.38 % d. Interest figured as 9% of the $65,000 amount, payable at the end of the year, but with the loan amount repayable in monthly installments during the year. Alternative A V % % Which alternative has the lowest effective annual interest rate?

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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Sam's Auto Repairs Inc. borrowed $9231 to be repaid by monthly payments over 4 years. Interest on the loan is 3.55% compounded semi-annually. (*Hint: General Annuity) Compute the equal monthly payment. Round your answer to 2 decimal places. Do not enter the dollar sign. Sample input: 124.34 need all steps of calculations for rough work and Create a full loan amortization table for Question
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Calculate the monthly payment by table lookup and formula. (Answers will not be exact due to rounding of percents in table lookup.) (Use 15.5% for table lookup.) (Use the loan amortization table.) (Round your answers to the nearest cent.) Number of Purchase price of a used car Down monthly Amount Total of monthly Total finance payment $90 payments financed payments $5,884.00 charge $1,839.00 APR $4,135 60 $4,045 15.5% Monthly Payment By table By formula ace
Calculate the monthly payment by table lookup and formula. (Answers will not be exact due to rounding of percents in table lookup.). (Use 13% for table lookup.). (Use the loan amortization table) (Round your answers to the nearest cent.) Purchase price of a used car $5,673 By table By formula Down payment $1,223 Monthly Payment Number of monthly payments 48 Amount financed $4,450 Total of monthly payments $5,729.76 Total finance charge $1,279.76 APR 13%

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