Star Electronics has a credit line of $100,000 with a bank. The loan agreement specifies an interest rate of 8% with a compensating balance requirement of 6% based on the borrowed amount. The compensating balance will be kept in a non-interest-bearing account. What is the effective interest rate if Star Electronics needs to borrow $90,000 for one year?
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- 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?You've worked out a line of credit arrangement that allows you to borrow up to $70 million at any time. The interest rate is .391 percent per month. In addition, 5 percent of the amount that you borrow must be deposited in a noninterest - bearing account. Assume that your bank uses compound interest on its line of credit loans. What is the effective annual interest rate on this lending arrangement? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e. g., 32.1 Suppose you need $15 million today and you repay it in eight months. How much interest will you pay? Note: Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to 2 decimal places, e.g., 1, 234, 567.89.You've worked out a line of credit arrangement that allows you to borrow up to $70 million at any time. The interest rate is .375 percent per month. In addition, 4 percent of the amount that you borrow must be deposited in a noninterest-bearing account. Assume that your bank uses compound interest on its line-of-credit loans. a. What is the effective annual interest rate on this lending arrangement? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.1 b. Suppose you need $25 million today and you repay it in eight months. How much interest will you pay? Note: Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to 2 decimal places, e.g., 1,234,567.89. a. Effective annual rate b. Total interest paid %
- National Co. needs to borrow P300,000 for the next 6 months. The company has a line of credit with a bank that allows the company to borrow funds with a 10% interest rate subject to a 20% of loan compensating balance. Currently, National Co. has no funds on deposit with the bank and will need the loan to cover the compensating balance as well as their other financing needs. How much will National Co. need to borrow?Calculate the APR of a loan for $10,025, including loan fees of $310, at 11% for 6 years. (Do not round intermediate calculations. Round your answer to the nearest tenth percent.) APR If you are trying to build credit by using a credit card, each time you make a purchase with the credit card, deduct that amount from your checking account. That way, when your credit card bill is due, you will have enough to pay the credit card off in full. Kathy Lehne is going to start doing this. She plans on paying her credit card bill in full this month. How much does she owe with a 6% APR and the following transactions? (Round your answer to the nearest cent.) 31-day billing cycle 10/1 Previous balance 10/3 Credit 10/12 Charge: King Soopers 10/15 Payment 10/25 Charge: Delta 10/30 Charge: Holiday Fun $1,158 $ 85 cr. 142 250 cr. 315 55 Answer is not complete. Amount owed Calculate (a) the amount financed, (b) the total finance charge, and (c) APR by formula. (Do not round intermediate calculations.…Hagar Company's bank requires a compensating balance of 10% on a $100,000 loan. If the stated interest on the loan is 7%, what is the effective cost of the loan?
- The First Common Bank has advertised one of its loan offerings asfollows: “We will lend you $125,000 for up to 3 years at an APR of 7.5% (interestcompounded monthly).” If you borrow $125,000 for one year, how much interestwill you have paid and what is the banks APY?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?Cray Computing needs a 8-month loan for $300,000. Its bank quotes a simple interest rate of 12% on the loan. What is the annual percentage rate (APR)? What is the period rate if there is a compensating balance requirement of 40% of the loan amount?
- You are taking out a single-payment loan that uses the simple interest method to compute the finance charge. You need to figure out what your payment will be when the loan comes due. The equation to calculate the finance charge is: FsFs = Amount of Loanx Interest Ratex Term of Loan where FsFs is the finance charge for the loan, and the term of the loan is in . You’re borrowing $10,000 for two years with a stated annual interest rate of 6%.Mr. Fernandez has applied for a revolving credit line of $ 9 million to assist in marketing a new product line. The terms of the loan will be as follows:(a) All the loans will be discount loans.(b) A fixed commitment fee of 0.2 percent will be charged.(c) The compensatory balance requirements will be 8 percent on the total credit line and 6 percent on the outstanding loans.(d) The bank will pay 2 percent interest on demand deposits.(e) The rate of interest to be charged will be the prime rate plus 3 percent.(f) The bank will use the "actual/360" accrual method to compute interest payments.(g) The credit line will be extended for a period of five years.The loan officer estimates that Mr. Fernandez will use about 67 percent of the credit line on average. If the prime rate is 10 percent and the required reserve rate on demand deposits is 16 percent, what is the effective cost to Mr. Fernandez?Paymaster Enterprises has arranged to finance its seasonal working capital needs with a short term bank loan. The loan will carry a rate of 0.072 per anum paid in advance (discounted). If Paymaster plans to borrow $760000 for a period of 7 months, what is the cost of the loan.