(Related to Checkpoint 18.2) (Estimating the cost of bank credit) Paymaster Enterprises has arranged to finance its seasonal working-capital needs with a short-term bank loan. The loan will carry a rate of 14 percent per annum with interest paid in advance (discounted). In addition, Paymaster must maintain a minimum demand deposit with the bank of 10 percent of the loan balance throughout the term of the loan. If Paymaster plans to borrow $110,000 for a period of 2 months, what is the annualized cost of the bank loan? The annualized cost of the bank loan is ☐ %. (Round to two decimal places.)

Cloud Venture has a line of credit with a local bank of $75,000. The loan agreement calls for interest of 6 percent with a compensating balance requirement of 3 percent that is based on the total amount borrowed. What is the effective interest rate if the firm needs $58,000 for one year to finance a fixed asset purchase?

Racman, Inc. needs P2,000,000 to finance its extension program. Racman, Inc. is negotiating a loan with Metropolis Bank which requires the company to maintain a compensating balance of 10% of the loan principal on deposit in a current account at the bank. Pierce, Inc. currently maintains a balance of P20,000 in its current account. The current account earns interest of 2% per annum. The interest rate on the loan is 12% per annum. 1. What is the effective interest rate on the loan?

XXX, Inc. finances tis seasonal working capital need with short-term bank loans. Management plans to borrow $65,000 for a year. The bank has offered the company a 3.5 percent discounted loan with a 1.5 percent origination fee. What are the interest payment and the origination fee requiered by the loan? What is the rate of interest charged by the bank?

It is important to know how to build an amortization schedule when firms (or individuals) take out bank loans. It all start with calculating the monthly payment using the formula below.using the formula provided, do  calculations to confirm the monthly payment for that loan based on the following information   Loan amount (P): $60,000 Number of periods (n): 3 years = 36 months Interest (i): 12% per year = 1% per month (should be expressed as 0.01)

Union Trust Commercial Bank has issued a one-year $100 million loan commitment to a customer for an up-front fee of 25 basis points. In the analysis to compute its loan rate for this customer, the bank has determined that its base lending rate will be 10% and its margin to compensate the bank for default risk for this particular customer is 2%. The back-end fee for non-usage of the commitment is 10 basis points. The bank requires a 5 percent compensating balance in demand deposits on the entire amount of the commitment. The reserve requirement ratio on demand deposits at the central bank is 10 percent. What is the loan rate offered to this customer? What is effective return on the loan to the bank if 50 percent of the loan is taken down? In computing this return, do not take into consideration future values of fee or interest income received.

Please need answer the general accounting question

Mr samuel approached the arnett national bank for a 15,000 loan to purchase vehicle the bank charges interest at the rate of 18 percentage per annum for the duration of the loan the bank also charges the followin fees :BANK FEES 8 percent, stamp duty 0.1 percent,legal fees 7.5 percent, application fee 1 percent a 20 percent deposit of the amount of the loan must also be made if the loan is approved .Calculate: the total amount paid of the fees charged by bank

The financial manager obtains a quote from a third bank, Bank TMN, for interest on the loan at 10.5%, compounded bi-annually    without calculating the effective annual rate (EAR for the loan from bank TMN, would you expect the EAR to be higher or lower than the EAR for the loan from bank DEF?

You plan to borrow $10,000 from the bank. For a four-year loan, the bank requires annual end-of-year payments of $3,223.73. What is the annual interest rate on this loan?