Current Attempt in Progress Carla Vista Cosmetics management is setting up a line of credit at the company's bank for $5 million for up to two years. The interest rate is 6.30 percent and the loan agreement calls for an annual fee of 63 basis points on any unused balance for the year. If the firm borrows $2.8 million on the day the loan agreement is signed, what is the effective rate for the line of credit? (Roûnd answer to 2 decimal places, e.g. 12.25%.) Effective interest rate

Current Attempt in Progress Carla Vista Cosmetics management is setting up a line of credit at the company's bank for $5 million for up to two years. The interest rate is 6.30 percent and the loan agreement calls for an annual fee of 63 basis points on any unused balance for the year. If the firm borrows $2.8 million on the day the loan agreement is signed, what is the effective rate for the line of credit? (Roûnd answer to 2 decimal places, e.g. 12.25%.) Effective 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

See similar textbooks

Similar questions

Bank A offers you a loan at 5.76% compounded 2 times a year. Bank B offers to loan you the same amount at 0.10% less than the rate offered by Bank A but compounded twice as often as the Bank A rate is. Which bank's loan should you accept? As your answer, enter the effective rate (in percent, to two decimal places at least) offered by the bank whose loan you should accept.
A car dealer offers payments of S522.59 per month for 48 months on a S25, 000 car purchase (Assume a S4, 000 cash down payment) . What is the loan'sapproximate annual percentage rate of interest? 12 % 9% 6% 11%
Data Back-Up Systems has obtained a $29,000, 90-day bank loan at an annual interest rate of 15%, payable at maturity. (Note: Assume a 365-day year.) a. How much interest (in dollars) will the firm pay on the 90-day loan? b. Find the 90-day rate on the loan. c. Annualize your result in part b to find the effective annual rate for this loan, assuming that it is rolled over every 90 days throughout the year under the same terms and circumstances. Answers a. The amount of interest on the loan is $___. (Round to the nearest cent.) b. The effective 90-day rate is___%. (Round to two decimal places.) c. The effective annual rate is___%. (Round to two decimal places.)
For the car loan described, give the following information. A car dealer will sell you the $30,750 car of your dreams for $6,000 down and payments of $665.06 per month for 60 months. (a) amount to be paid $ 39903.60 (b) amount of interest $ 9153.60 (c) interest rate (Round your answer to two decimal places.) 20.67 % (d) APR (rounded to the nearest tenth of a percent) %
A store offers a 'special deal' to lend us $5,500 today, whereby you pay off the loan in one year with 12 monthly payments of $500 each, with the first payment due 1-month from today. What effective annual rate (EAR) are they charging us on the loan?
Toyota S murang auto finance company is prepared to offer you a loan of $38,000 to buy a new Toyota Corolla. The repayments are at the end of every year for a period of 7 years. If the interest rate on the loan is 12%, perform loan amortization calculation that will allow you to determine the amount of the loan outstanding after making the second installment. PV of ordinary annuity-= C/r x [1-1(1+r)n]
Bank A offers you a loan at 8.52% compounded 5 times a year. Bank B offers to loan you the same amount at 0.10% less than the rate offered by Bank A but compounded twice as often as the Bank A rate is. Which bank's loan should you accept? As your answer, enter the effective rate (in percent, to two decimal places at least) offered by the bank whose loan you should accept.
Please help me to solve these question correct with good presentation using commas and dollar sign in each figure A borrower takes out a 30-year adjustable-rate mortgage loan for $393,000 with monthly payments. The first two years of the loan have a "teaser" rate of 4%, after that, the rate can reset with a 5% annual payment cap. On the reset date, the composite rate is 6% (at the end of year 2). Assume that the loan allows for negative amortization. What would be the outstanding balance on the loan at the end of Year 3?
For the car loan described, give the following information. A car dealer will sell you the $30,750 car of your dreams for $6,000 down and payments of $665.06 per month for 60 months. (a) amount to be paid $ 512.5 (b) amount of interest $ (c) interest rate (Round your answer to two decimal places.) 1.72 X % (d) APR (rounded to the nearest tenth of a percent) 20.7 X %
For the car loan described, give the following information. A car dealer will sell you the $30,350 car of your dreams for $6,000 down and payments of $669.06 per month for 60 months. (a) amount to be paid $ (b) amount of interest $ (c) interest rate (Round your answer to two decimal places.) % (d) APR (rounded to the nearest tenth of a percent)
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
A car loan is taken for $22,000 to be paid back in 5 years, with monthly payments of $457. What nominal annual interest rate is being charged in this loan? 10.99% 9.00% 1.25% 0.75%

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS