The annual interest rate is %
Q: A payday loan is structured to obscure the true interest rate you are paying. For example, in…
A: Effective rate of interest is the equivalent interest rate which is determined by considering the…
Q: effective annual return on its consumer loans of 18.2 percent per year. The bank uses daily…
A: An investor earns interest on the amount invested. It is a fee paid to the investor for depositing…
Q: A local lending institution advertises the "51-50 Club". A person may borrow $2000 and repay $51 for…
A: P (Present value)= 2000 A (monthly payment)= $51 n (compounding periods)= 50 i%=?
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A: Notes payable is a promise to pay certain amount by the buyer to the seller on a date and interest…
Q: The "-5-6" scheme is availed by a lot of individuals and prohibited by law. This transaction is…
A: Following formula can be used to calculate annual effective interest rate: I= (1+(r/m) m -1 Where i…
Q: Tai Credit Corp. wants to earn an effective annual return on its consumer loans of 16.5 percent per…
A: Here, Effective Rate of Interest is 16.5% Compounding Period is Daily i.e 365
Q: A bank that provides overdraft protection charges 12 percent for each $100 (or portion of $100)…
A: Part (a)The overdraft protection charge = 12% for each $100 (or portion of $100) borrowedThus 12% is…
Q: A payday loan is structured to obscure the true interest rate you are paying. For example, in…
A: In this case, first, we have to calculate the biweekly interest rate and then we have to calculate…
Q: limits are needed on payday-lending businesses, according to an article in the Feb. 14, 2007 issue…
A: Payday loan is a type of loan on which very high rate of interest is charged from the borrower. The…
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A: a. Calculate the accounts that will be acceptable and calculate the total dollar amount of accounts…
Q: You are the loan department supervisor for a bank. This installment loan is being paid off early,…
A:
Q: Stephens Metals Company has a revolving credit agreement with its bank permitting it to borrow up to…
A: With the given information, we can determine the annual finance cost of borrowing $20 million under…
Q: -6" scheme availed by a lot of individuals is prohibited by law. This transaction is considered…
A: Annual effective interest is interest rate after considering the effect of compounding.
Q: Colson Company has a line of credit with Federal Bank. Colson can borrow up to $375,000 at any time…
A:
Q: What statement is TRUE regarding credit card finance charges? Most credit cards regularly charge 5…
A: The statement that is TRUE regarding credit card finance charges is:Interest is usually calculated…
Q: A bank offers 30-year, $200,000 mortgages (monthly payments) at 6.2 percent and charges a $6,000…
A: 6.62%To calculate the APR, we first need to calculate the total cost of the loan, including the loan…
Q: You've worked out a line of credit arrangement that allows you to borrow up to $70 million at any…
A: I have provided a detailed answer in the Explanation section.Explanation:Let's break down the…
Q: Cumberland Furniture wishes to establish a prearranged borrowing agreement with its local commercial…
A: Effective annual rate represents the actual interest rate over a year for the company.
Q: a. What is the effective annual interest rate on this lending arrangement? Note: Do not round…
A: a)Monthly Interest = amount borrowed * Interest rate = 70,000,000 * 0.375%…
Q: Simple Simon's Bakery purchases supplies on terms of 1.7/10, net 25. If Simple Simon's chooses to…
A: As per the given information:To determine:The effective rate of interest.The effective rate of…
Q: You are the loan department supervisor for the Pacific National Bank. The following installment loan…
A: We have formula for rebate fraction as Rebate fraction = sum of digits of remaining payments / sum…
Q: olland Construction Company has an outstanding 180-day bank loan of $393,000 at an annual interest…
A: Effective interest rate is the interest that is being effective after considering the impact of…
Q: A payday loan company charges a $25 fee for a $550 payday loan that will be repaid in 14 days using…
A: Interest Amount = Principal * Rate * Time
Q: Suppose Olivia has $7,020 in credit card debt on the B credit card which has annual interest rate of…
A: Credit Card: It represents a card issued by the banks as a service of allowing cardholders to…
Q: Which of the following statement is true of amortization? The computation of loan amortization is…
A: We take loans to buy things that we cannot afford on our own. The loan is then repaid through fixed…
Q: Suppose Olivia has $6,660 in credit card debt on the VB credit card which has annual interest rate…
A: A credit card outstanding is subjected to annual interest rate of 18.2% on the first card, and 0% on…
Q: Simple Simon's Bakery purchases supplies on terms of 1.5/10, net 30. If Simple Simon's chooses to…
A: Trade credit refers to the purchase of goods or services by the customers from the seller and paid…
Q: Two banks in the area offer 20-year, $270,000 mortgages at 5.6 percent and ch $4,300 loan…
A: Annual percentage rate refers to the interest rate that is being charged by the lender to the…
Q: a. Calculate the loan’s annual financing cost. b. Calculate the loan’s annual percentage rate. c.…
A: Annual percentage rate (APR) refers to a real interest rate which an investor is expect from his…
Q: Suppose that you owe $2,000 on a credit card that charges 18% APR and you pay either the minimum 10%…
A: The time to pay off the debt, the installment, beginning, and ending balances can be seen from the…
Q: Determine the annual financing cost of a 6-month (182 day) $20,000 discounted bank loan at a stated…
A: Given: Principal Amount = $20000 Interest rate = 10%
Q: A certificate of deposit (CD) is an agreement between a bank and a saver in which the bank…
A: It is very important for the investor to compare the annual yields of the investment instead of…
Q: Clark’s Landscaping bills customers subject to terms 2/25, n/60. Required: Compute the annual…
A: Annual Interest Rate= Discount % / 100 - Discount % * 365 / days paid early
Q: The local bank is currently offering a new investment product, where deposits earn interest…
A: The FV of an investment refers to the cumulative value of its cash flows assuming that they grow at…
Q: A payday loan is structured to obscure the true interest rate you are paying. For example, in…
A: In a payday loan , for $200 , we need to pay $230 which means we need to calculate rate applied in 2…
Q: A certificate of deposit (CD) is an agreement between a bank and a saver in which the bank…
A: Effective annual yield can be found by using the following formula:The effective rates are interest…
Q: Barcain Credit Corporation wants to earn an effective annual return on its consumer loans of 16…
A: Formula for effective interest rate can be used to compute stated interest rate as: r = (1+i/n) n –…
Q: You are the $). (Round dollars to the nearest cent.) Amount Number of Monthly Payments Financed…
A: A borrower may sometimes pre pay a loan, that is pay before the due date. In such a case the lender…
Q: (Related to Checkpoint 18.2) (Estimating the cost of bank credit) Paymaster Enterprises has arranged…
A: APR stands for Annual Percentage Rate. It is a measure used to express the true cost of borrowing on…
Q: Boyd Company has a line of credit with State Bank. Boyd can borrow up to $520,000 at any time over…
A: Cash flows statement includes:Cash flows from operating activitiesCash flows from investing…
Q: First National bank charges 12.4 percent compounded monthly on its business loans. First United Bank…
A: Effective annual interest rate is the real rate that we earn on our savings or paid onto a loan when…
Q: Based on the following information, determine the maximum loan amount available as of July 31, 2021.…
A: The maximum amount of loan states the aggregate sum that a person or participant is authorised to…
Q: A payday loan is structured to obscure the true interest rate you are paying. For example, in…
A: Answer- Step 1 - Calculation of r - r = (FV/PV)^(1/n) - 1 Given, FV = 230 PV = 200 n = 1 Putting…
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- Jack Abrams borrowed $8,000 for nine months at an interest rate of 7% (simple interest). The bank also charges a $100 processing fee. What is the actual interest rate for this loan?Capital structure Kirsten Neal is interested in purchasing a new house given that mortgage rates are low. Her bank has specific rules regarding an applicant's ability to meet the contractual payments associated with the requested debt. Kirsten must submit personal financial data for her income, expenses, and existing installment loan payments. The bank then calculates and compares certain ratios to predetermined allowable values to determine if it will make the requested loan. The requirements are as follows: (1) Monthly mortgage payments <29% of monthly gross (before-tax) income. (2) Total monthly installment payments (including the mortgage payments) <38% of monthly gross (before-tax) income. Kirsten submits the following personal financial data: Monthly gross (before-tax) income Monthly installment loan obligations Requested mortgage Monthly mortgage payment a. Calculate the ratio for requirement 1. $4,450 375 145,000 1,120 a. The ratio for requirement 1 is%. (Round to two decimal…A bank offers your firm a revolving credit arrangement for up to $86 million at an interest rate of 2.15 percent per quarter. The bank also requires you to maintain a compensating balance of 2 percent against the unused portion of the credit line, to be deposited in a non-interest-bearing account. Assume you have a short-term investment account at the bank that pays 1.50 percent per quarter, and assume that the bank uses compound interest on its revolving credit loans. a. What is your effective annual interest rate (an opportunity cost) on the revolving credit arrangement if your firm does not use it during the year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Effective annual interest rate % b. What is your effective annual interest rate on the lending arrangement if you borrow $50 million immediately and repay it in one year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2…
- On the June 12 interest payment date, the outstanding balance on Delta Nurseries’ revolving loan was $65,000. The floating interest rate on the loan stood at 6.25% on June 12, but rose to 6.5% on July 3, and to 7% on July 29. If Delta made principal payments of $10,000 on June 30 and July 31, what were the interest charges to its bank account on July 12 and August 12? Present a repayment schedule supporting the calculations. (Round your final answers to 2 decimal places.) Date Number of days Interest rate (%) Interest ($) Accrued interest ($) Payment (Advance) ($) Principal portion ($) Balance ($) 12-Jun -- -- -- -- -- 65,000 30-Jun 18 6.25 10,000.00 10,000 55,000 3-Jul 3 6.25 55,000 12-Jul 9 6.50 55,000 29-Jul 17 6.50 55,000 31-Jul 2 7.00 10,000.00 10,000 45,000 12-Aug 12 7.00 45,000Simple Simon's Bakery purchases supplies on terms of 1.1/10, net 25. If Simple Simon's chooses to take the discount offered, it must obtain a bank loan to meet its short-term financing needs. A local bank has quoted Simple Simon's owner an interest rate of 10.6% on borrowed funds. Should Simple Simon's enter the loan agreement with the bank and begin taking the discount? (Hint: Use 365 days for a year.) The cost of forgoing the discount is %. (Round to one decimal place.) Should Simple Simon's enter the loan agreement with the bank and begin taking the discount? (Select the best choice below.) A. Simple Simon's should enter into the loan agreement but not begin taking the discount. B. Need more information to answer the question. OC. Simple Simon's should enter into the loan agreement with the bank and begin taking the discount. D. Simple Simon's should not enter into the loan agreement but should begin taking the discount.Simple Simon’s Bakery purchases supplies on terms of 1/10, Net 25. If Simple Simon’s chooses to take the discount offered, it must obtain a bank loan to meet its short-term financing needs. A local bank has quoted Simple Simon’s owner an interest rate of 12% on borrowed funds and no origination fees. Should Simple Simon’s enter the loan agreement with the bank in order to begin taking the discount?
- . Calculating EAR First National Bank charges 11.4 percent compounded monthly on its business loans. First United Bank charges 11.6 percent compounded semiannually. As a potential borrower, to which bank would you go for a new loan ?If you sign a discount note for $7,500 at a bank discount rate of 5% for 3 months, what is the effective interest rate? Round to the nearest tenth percent. Step 1 The effective interest rate is the actual interest rate charged on a discounted note and takes into account the fact that the borrower does not receive the full amount of the principal. It is calculated using the bank discount, the proceeds, and time. The bank discount is calculated as follows where the discount rate is given as a decimal and the time will be a fraction whose numerator is the given amount of time in months and denominator is 12 months. bank discount = face value ✕ discount rate ✕ time The rate was given to be 5%. As a decimal, we have . Calculate the bank discount (in $) for the $7,500 promissory note at a discount of 5% for 3 months. bank discount = face value ✕ discount rate ✕ amount of time in months 12 months = $7,500 ✕ ✕ 3 12 = $first national bank charges 13.8 percent compounded monthly on its business loans. First United Bank charges 14.1 percent compounded semiannually. As a potential borrower, which bank would you to for a new loan?
- On January 1, 2021, Tropical Paradise borrows $33,000 by agreeing to a 6%, four-year note with the bank. The funds will be used to purchase a new BMW convertible for use in promoting resort properties to potential customers. Loan payments of $775.01 are due at the end of each month with the first installment due on January 31, 2021. Record the issuance of the installment note payable and the first two monthly payments. (Do not round intermediate calculations. Round your final answers to 2 decimal places. If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)At the Central Furniture Company, customers who buy on credit pay an effective annual interest rate of 16.1%, based on monthly compounding. (a) What is the nominal annual interest rate that they pay? (b) Research the effective annual interest rates charged on a credit card that you or a friend has. How does the rate change if there is a late or skipped payment? What drives these rates? Are the rates ethical? Why or why not?Payday loans (also called cash advance loans) are short-term, high-interest loans marketed as a way for people to borrow money for a short period of time until their paycheck arrives. However, like many other short-term loans, they should be used with extreme caution. Payday loans typically carry a fixed fee of $15 to $30 per $100 borrowed, and lenders sometimes demand access to your checking account to make sure you will pay the fees. Complete parts (a) through (c) below GSTID a. Consider a payday loan that has a fixed fee of $17 per $100 borrowed that is due in 2 weeks (when your paycheck arrives). If you borrow $800, what is the total fee (not including your $800 principal) you owe the lender at the end of 2 weeks? $136 (Round to the nearest cent as needed.) b. What is the interest rate for that 2-week period? 17% (Round to the nearest whole number as needed.) What is the equivalent annual percentage rate (APR) for this loan? (Assume that there are 52 weeks in 1 year). How does this…
