(Related to Checkpoint 9.1) (Floating-rate loans) The Bensington GlassCompany entered into a loan agreement with the firm's bank to financethe firm's working capital. The loan called for a floating rate that was 26 basispoints (0.26 percent) over an index based on LIBOR. In addition, the loanadjusted weekly based on the closing value of the index for the previous weekand had a maximum annual rate of 2.17 percent and a minimum of 1.72percent. Calculate the rate of interest for weeks 2 through 10.DateLIBORWeek 11.93%Week 21.67%Week 31.53%Week 41.39%Week 51.63%Week 61.65%Week 71.67%Week 81.92%Week 91.92%(Click on the iconin order to copy its contents into a spreadsheet)

Step 1: Given that,The floating rate is 26 basis points (0.26%) over LIBOR.The loan adjusts weekly…

Answered: (Related to Checkpoint 9.1)…

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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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%
A bank applies a semi-annually capitalized nominal rate of 11.8% for an investment. Calculate monthly effective rate.
PanAir Reservations (PAR) borrowed $270,000 for 36 days from its bank. The interest rate on the loan is 9 percent. Assume there are 360 days in a year. Calculate the APR and rEAR assuming the loan is a simple interest loan with no compensating balance requirement. Do not round intermediate calculations. Round your answers to two decimal places. APR: % rEAR: % Calculate the APR and rEAR assuming the loan is a simple interest loan with a 20 percent compensating balance requirement, and PAR currently holds no funds at the lending bank. Do not round intermediate calculations. Round your answers to two decimal places. APR: % rEAR: % How much would PAR have to borrow if it needed $270,000 to pay bills and the loan required a 20 percent compensating balance? Round your answer to the neares dollar. $
(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
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
Vikrambahi
(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.)
A credit union's Rate-Climber GIC pays rates of 21%, 26%, and 31% compounded semiannually in successive years of a three-year term. What will be the maturity value of $13,000 invested in this GIC? (Do not round Intermedote.colculations ond round your Anal answer to 2 declmal places.) Maturity value $1
Cray Computing needs a 6-month loan for $300,000. Its bank quotes a simple interest rate of 11% on the loan. a.) What is the annual percentage rate (APR) if there is a compensating balance requirement of 30% of the loan amount? b.) What is the effective annual rate (EAR) if there is a compensating balance requirement of 30% of the loan amount?
Navy Bank requires borrowers to keep a 13 percent compensating balance. Gorman Jewels borrow $380,000 at a 6 percent stated APR. What is the effective interest rate on the loan? (Round answer to 2 decimal places, e.g. 12.25%.) Effective interest rate ________ %

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