ou decided to go and apply for a credit card at your local financial institution. The Prime rate currently announced on June 1 was 3.25%. You have good credit history and a FICO score of 700. The lowest rate that they can offer to individuals is a 18.99% APR for a credit card that gives cashback on purchases and rewards. You were offered 21.99% APR for the credit card. How did the lender determine or calculate what rate they should offer you?

Q: A bank is negotiating a loan. The loan can either be paid off as a lump sum of $100,000 at the end…

A: The correct answer is given in the second step.

Q: You plan to buy an 11-year, $11,000 bond with an annual bond rate of 4% and keep it to maturity. How…

A: 1. Calculating the Present Value of Coupon Payments: The formula to calculate the present value of…

Q: Muhammad takes out a loan of $ 2,130, at 8% simple interest, for 8 years. How much will he pay back…

A: An interest rate is the amount of interest due per period, as a proportion of the amount lent,…

Q: If a lender makes a simple loan of ​$800 for 4 years and charges 3%,then the amount that the lender…

A: The objective of the first part of the question is to calculate the total amount that the lender…

Q: If a lender makes a simple loan of $400 for 5 years and charges 7​%, then the amount that the lender…

A: The objective of the first part of the question is to calculate the total amount that the lender…

Q: You borrow $700,000 at 3% interest for 30 years on a mortgage.  How much total will you pay back on…

A: Compound interest is also referred to as "interest that is not simple." Compound interest does not…

Q: Lane French had a bad credit rating and went to a local cash center. He took out a $100 loan payable…

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Q: You want to buy a $32,000 car.  You can finance the car for 1.5% interest for 6 years. What is your…

A: The formula for monthly payment is calculated as follows: Monthly payment = Pr121+r12n1+r12n-1 where…

Q: Find FV: You have $2,000 in a savings account that earns 1.5% interest per year. What will be the…

A: Future value is the value of an asset present at a future date based on an expected growth rate…

Q: June has a small house, on a small street, in a small town. If she sells the house now, she will…

A: From given information, if house is sold now, she will get $110,000 and invest in 1-year bond with…

Q: Note the cash flow series in the graph. The amounts of 5,000 at years 2 and 4 and X are inflows to…

A: Cash inflow at year 2=$5000Cash inflow at year 4=$5000Cash inflow at year 6=XX=$6000Year=6 yearsr=2%

Q: A discount interest loan is a loan arrangement where the interest and any other related charges are…

A: The given information: Loan for 1 year is 10,000 The monthly payment is 1,400 Net fund the lender…

Q: In an article in the New York Times (Is Junk Food Really Cheaper? September 24, 2011), Mark Bittman…

A: In this scenario, we have two different meal options:A home-cooked chicken with vegetables meal…

Q: 4. Ellen borrowed P100,000 from a local bank at 10% annually. She must pay back the loan in five…

A: Given; Amount borrowed= P100000 Interest rate= 10% annually Time period= 5 years Number of…

Q: 4-19. In 2014, the average debt for college student loans is $32,300. This amount to a $300 monthly…

A: Given: The loan amount is = $32,300 The monthly payment amount is = $300 Repayment loan period = 10…

Q: Jon’s grandfather was planning to give him $11,000 in 14 years.  Jon has convinced him to pay him…

A: Continuous compounding is the concept where the Compound-Interest for a principal is compounded to…

Q: A machine costing $24,000 to buy and $3,500 per year to operate will save mainly labor expenses in…

A: Annual cash flow is the total amount of money that flows in and out of a business or individual's…

Q: Tom Evers an attorney is planning for retirement. He earns $126,000 a year and estimates that he…

A: Given,  Tom earns $126,000 and estimates that he will need 80% of his salary for retirement in 10…

Q: Suppose you were promised $400 three years from now and $600 at the end of five years. How much is…

A: Here, we calculate the worth at 12% interest as follow;

Q: You deposit $200 each month into an account earning 5% interest compounded monthly. a) How much will…

A: The future value of a deposit refers to how much the deposited money will grow over time,…

Q: You have won a lottery that pays you $100,000.00 at the end of this year, $110,000.00 at the end of…

A: Present value is the value of investment in today's dollar.Future value is the value of investment…

Q: Frank purchased his house 16 years ago by taking out a 25-year mortgage for $150,000. The mortgage…

A: The term mortgage refers to a loan used to purchase or maintain a home, land, or other types of real…

Q: Does the compounding increases the amount of interest paid over a year atthe same nominal interest…

A: The interest rate is the income earned by the investment in the economy. When the money is invested…

Q: Consider a student loan of $12,500 at a fixed APR of 9% for 30 years. a. Calculate the monthly…

A: Given,  Loan = $12,500  APR = 9%  Time = 30 years