On July 15, when the prime rate was set at 3.5%, Canadian Footwear took out an operating loan from CIBC for $9,750.00 atprime plus 1.75%. The terms of the loan require a fixed payment of $1,790.00 on the 15th of every month until the loan isrepaid. The prime rate climbed by 0.5% on September 26.Complete the repayment schedule below by filling in the appropriate interest rates.DateBalance Annualbefore InterestTransaction RateNumber Interest Accruedof Days Charged InterestPayment(+) orAdvancePrincipalAmountBalance afterTransaction(-)Jul 15Aug 15$9,750.00$9,750.009631/365Sep 15$8,003.475% 31/365Sep 26$6,249.16Oct 15$6,249.1628%11/365$9.89% 19/365$18.70Nov 15$4,487.75%31/365$21.92$43.47$35.69 $35.69$9.89$28.59$21.92$43.47$1,790.00 $1,746.53$8,003.47$1,790.00 $1,754.31$6,249.16$0.00$1,790.00 $1,761.41$0.00$6,249.16$4,487.75Dec 15$2,719.67%30/365$12.85Jan 15$942.52%31/365$4.60$1,790.00 $1,768.08$12.85 $1,790.00 $1,777.15$4.60$2,719.67$942.52$947.12 $942.52$0.00

1. August 15: - Balance before transaction: $9,750.00 - Annual interest rate: 3.5% - Number of…

Answered: On July 15, when the prime rate was set…

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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(Related to Checkpoint 9.1) (Floating-rate loans) The Bensington Glass Company entered into a loan agreement with the firm's bank to finance the firm's working capital. The loan called for a floating rate that was 26 basis points (0.26 percent) over an index based on LIBOR. In addition, the loan adjusted weekly based on the closing value of the index for the previous week and had a maximum annual rate of 2.18 percent and a minimum of 1.76 percent. Calculate the rate of interest for weeks 2 through 10. Date Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 LIBOR 1.93% 1.62% 1.52% 1.38% 1.64% 1.66% 1.71% 1.88%
(Related to Checkpoint 9.1) (Floating-rate loans) The Bensington Glass Company entered into a loan agreement with the firm's bank to finance the firm's working capital. The loan called for a floating rate that was 26 basis points (0.26 percent) over an index based on LIBOR. In addition, the loan adjusted weekly based on the closing value of the index for the previous week and had a maximum annual rate of 2.17 percent and a minimum of 1.74 percent. Calculate the rate of interest for weeks 2 through 10. Date LIBOR Week 1 1.94% Week 2 1.62% Week 3 1.51% Week 4 1.38% Week 5 1.56% Week 6 1.66% Week 7 1.73% Week 8 1.92% Week 9 1.94%
A $7,650.00 demand loan was taken out on March 4 at a fixed interest rate of 7.7% with fixed monthly payments of $1,200.00. The first monthly payment is due April 4 and the 4th of every month thereafter. Prepare a full repayment schedule for the loan. (Round all monetary values to the nearest penny.) (Use a minus sign before the dollar sign to denote a negative monetary value. For example, "-$149.63".) (Give all "Number of Days" quantities as fractions with denominator 365.) Date Balance before Transaction Annual Interest Rate Number Interest Accrued of Days Charged Interest Payment (+) or Advance (-) Principal Balance after Amount Transaction Mar 4 $7,650.00 Apr 4 7.7% May 4 7.7% Jun 4 7.7% Jul 4 7.7% Aug 4 7.7% Sep 4 7.7% Oct 4 7.7%
On July 15, when the prime rate was set at 4.25%, Canadian Footwear took out an operating loan from CIBC for $9,000.00 at prime plus 1.75%. The terms of the loan require a fixed payment of $1,690.00 on the 15th of every month until the loan is repaid. The prime rate climbed by 0.25% on September 21. Complete the repayment schedule below by filling in the appropriate interest rates. Date Jul 15 Aug 15 Sep 15 Sep 21 Oct 15 Nov 15 Dec 15 Jan 15 Balance before Transaction $9,000.00 $7,355.86 $5,703.34 $5,703,34 $4,042.41 $2,373.87 $696.06 Annual Interest Rate * * * * * $45.86 $37.48 $5.63 24/365 $23.44 31/365 $21.46 % 30/365 $12,19 31/365 % % % % % Number Interest Accrued of Days Charged Interest % 31/365 31/365 6/365 Payment (+) or Principal Advance Amount (-) $45.86 $1,690.00 $1,644,14 $37.48 $1,690.00 $1.652.52 $5.63 $0.00 $0.00 $1,690.00 $1,660.93 $29.07 $21.46 $1,690.00 $1,668.54 $1,690.00 $1,677.81 $699.75 $696.06 $12.19 $3.69 $3,69 Balance after Transaction $9,000.00 $7,355.86…
Finance charges on a payday loan may not exceed 16.7% of the amount advanced. Find the annual interest rate if $300 is borrowed for 10 days at the maximum allowable charge. The annual interest rate is ___ % (round to the nearest percent) Show all work and explanations.
On May 3, 2020, Leven Corporation negotiated a short-term loan of $645,000. The loan is due October 1, 2020, and carries a 5.30% interest rate. Use ordinary interest to calculate the interest. What is the total amount Leven would pay on the maturity date? (Use Days in a year table.) Note: Do not round intermediate calculations. Round your answer to the nearest cent. Maturity value
(Related to Checkpoint 9.1) (Floating-rate loans) The Bensington Glass Company entered into a loan agreement with the firm's bank to finance the firm's working capital. The loan called for a floating rate that was 26 basis points (0.26 percent) over an index based on LIBOR. In addition, the loan adjusted weekly based on the closing value of the index for the previous week and had a maximum annual rate of 2.23 percent and a minimum of 1.72 percent. Calculate the rate of interest for weeks 2 through 10. Date Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Wook 7 Week 8 LIBOR 1.92% 1.66% 1.51% 1.35% 1.64% 1.59% 1.69% 1.92% The rate of interest for week 2 is%. (Round to two decimal places.) COLLE
On 1 January 2017, a company which prepares financial statement to 30 June each year buys € 400,000 of 5% loan notes for € 411,225. Interest will be received half-yearly on 30 June and 31 December and the loan notes will be repaid at a premium of 10% on 31 December 2020. The effective rate of interest is 3.5% per half year and the company intends to hold this investment until maturity. Calculate the amount of interest income that should be recognised in the company's financial statements for each of the years to 30 June 2017, 2018, 2019. Also calculate the amount at which the loan notes should be shown in the statement
Required: A bank sells a "three against six" $3,000,000 FRA for a three-month period beginning three months from today and ending six months from today. The purpose of the FRA is to cover the interest rate risk caused by the maturity mismatch from having made a three-month Eurodollar loan and having accepted a six-month Eurodollar deposit. The agreement rate with the buyer is 5.57 percent. There are actually 92 days in the three-month FRA period. Assume that three months from today the settlement rate is 4.910 percent. Determine how much the FRA is worth and who pays who-the buyer pays the seller, or the seller pays the buyer. Note: Round your intermediate calculations to 6 decimal places. Round your answer to 2 decimal places. Assume 360 days in a year. the absolute value of the FRA
On May 3, 2020, Leven Corporation negotiated a short-term loan of $870,000. The loan is due October 1, 2020, and carries a 6.80% interest rate. Use ordinary interest to calculate the interest. What is the total amount Leven would pay on the maturity date? (Use Days in a year table.) Note: Do not round intermediate calculations. Round your answer to the nearest cent. Maturity value:
(Related to Checkpoint 9.1) (Floating-rate loans) The Bensington Glass Company entered into a loan agreement with the firm's bank to finance the firm's working capital. The loan called for a floating rate that was 26 basis points (0.26 percent) over an index based on LIBOR. In addition, the loan adjusted weekly based on the closing value of the index for the previous week and had a maximum annual rate of 2.22 percent and a minimum of 1.74 percent. Calculate the rate of interest for weeks 2 through 10. Date LIBOR Week 1 1.94% Week 2 1.67% Week 3 1.54% Week 4 1.32% Week 5 1.64% Week 6 1.64% Week 7 1.69% Week 8 1.92% Week 9 1.85% The rate of interest for week 2 is___________ %.(Round to two decimal places.)
On May 3, 2020, Leven Corporation negotiated a short-term loan of $660,000. The loan is due October 1, 2020, and carries a 5.40% interest rate. Use ordinary interest to calculate the interest. What is the total amount Leven would pay on the maturity date? (Use Days in a year table.) Note: Do not round intermediate calculations. Round your answer to the nearest cent.

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