Cost of Bank Loans Gifts Galore Inc. borrowed $1.65 million from National City Bank. The loan was made at a simple annual interest rate of 15% a year for 3 months. A 15% compensating balance requirement raised the effective interest rate. Do not round intermediate calculations. Round your answers to two decimal places. The nominal annual rate on the loan was 12.5%. What is the true effective rate? % What would be the effective cost of the loan if the note required discount interest? % What would be the nominal annual interest rate on the loan if the bank did not require a compensating balance but required repayment in three equal monthly installments? %
Cost of Bank Loans Gifts Galore Inc. borrowed $1.65 million from National City Bank. The loan was made at a simple annual interest rate of 15% a year for 3 months. A 15% compensating balance requirement raised the effective interest rate. Do not round intermediate calculations. Round your answers to two decimal places. The nominal annual rate on the loan was 12.5%. What is the true effective rate? % What would be the effective cost of the loan if the note required discount interest? % What would be the nominal annual interest rate on the loan if the bank did not require a compensating balance but required repayment in three equal monthly installments? %
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
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Cost of Bank Loans Gifts Galore Inc. borrowed $1.65 million from National City Bank. The loan was made at a simple annual interest rate of 15% a year for 3 months. A 15% compensating balance requirement raised the effective interest rate. Do not round intermediate calculations. Round your answers to two decimal places. The nominal annual rate on the loan was 12.5%. What is the true effective rate? % What would be the effective cost of the loan if the note required discount interest? % What would be the nominal annual interest rate on the loan if the bank did not require a compensating balance but required repayment in three equal monthly installments? %
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