Homework Help is Here – Start Your Trial Now!
Business
Finance
(e) In return for a loan of £500, a loan shark charges £1 per day payable when the loan is paid back. What is the APR if you pay back the loan and fees after 155 days?

(e) In return for a loan of £500, a loan shark charges £1 per day payable when the loan is paid back. What is the APR if you pay back the loan and fees after 155 days?

Essentials Of Investments
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
icon
Related questions
Question

Answer 1e please

(a) A lecturer borrows £10,000 from a bank with an effective interest rate of 3.5% per annum. She pays back the loan after 5 years. How much does she pay back? (b) Determine the AER corresponding to the nominal rate of discount d(12) = 7% per annum. (c) Suppose you are paying off your new fridge by monthly instalments of £25 paid in arrears over five years. Assuming an effective interest rate of 3% per annum, what was the price of the fridge? (d) Determine the value of the symbol for an AER of 6%. (e) In return for a loan of £500, a loan shark charges £1 per day payable when the loan is paid back. What is the APR if you pay back the loan and fees after 155 days?
Transcribed Image Text:(a) A lecturer borrows £10,000 from a bank with an effective interest rate of 3.5% per annum. She pays back the loan after 5 years. How much does she pay back? (b) Determine the AER corresponding to the nominal rate of discount d(12) = 7% per annum. (c) Suppose you are paying off your new fridge by monthly instalments of £25 paid in arrears over five years. Assuming an effective interest rate of 3% per annum, what was the price of the fridge? (d) Determine the value of the symbol for an AER of 6%. (e) In return for a loan of £500, a loan shark charges £1 per day payable when the loan is paid back. What is the APR if you pay back the loan and fees after 155 days?
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Checking Accounts
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
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…
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