wilson Montgomery was curous about the difference between a simple discount note and a simple interest note. he is considering taking out one of the other. both have the same term 5,500@ 6% for 18 months. a) calculate the simple interest note proceeds and effective rate. simple interest note proceeds? effective rate? B) calculate the simple discount note proceeds ans effective rate. simple discount note proceeds? effective rate round to the nearest tenth percent

wilson Montgomery was curous about the difference between a simple discount note and a simple interest note. he is considering taking out one of the other. both have the same term 5,500@ 6% for 18 months. a) calculate the simple interest note proceeds and effective rate. simple interest note proceeds? effective rate? B) calculate the simple discount note proceeds ans effective rate. simple discount note proceeds? effective rate round to the nearest tenth percent

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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The Second National Bank of Fullerton advertises an APR of 15%, but it indicates in the “small print” that compounding occurs on a monthly basis for personal loans with no collateral required. This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. Determine the APY you would pay using an equation. The APY paid would be % per year.
Carl Sonntag wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both had the same terms: $20,050 at 8% for 3 years. Use ordinary interest as needed. a. Calculate the simple interest note proceeds. Simple interest note proceeds b. Calculate the simple discount note proceeds. Simple discount note proceeds
Ricky Ripov’s Pawn Shop charges an interest rate of 18.25 percent per month on loans to its customers. Like all lenders, Ricky must report an APR to consumers. a. What rate should the shop report? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the effective annual rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Simmons Corporation can borrow from its bank at 21 percent to take a cash discount. The terms of the cash discount are 2.5/14, net 50. Compute the cost of not taking the cash discount. Note: Use a 360-day year. Do not round intermediate calculations. Input your final answer as a percent rounded to 2 decimal places.
Answer
You were offered either a simple interest note or a simple discount note with the following terms: $30,878 at 6% for 36 months. a. Calculate the effective interest rate. Note: Do not round intermediate calculations. Round your final answer to the nearest tenth percent. Effective interest rate % b. Based on the effective interest rate, which would you choose? simple discount note simple interest note
Carl Sonntag wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both had the same terms: $18,850 at 7% for 4 years. Use ordinary interest as needed. a. Calculate the simple interest note proceeds. Simple interest note proceeds $ Simple discount note proceeds b. Calculate the simple discount note proceeds. $ 24,128 13,572
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 = $
narubhai
Pay it back Credit is a payday loan company that offers quick, short term loans using the borrower's future paychecks as collateral. Pay it back Credit charges $28 for each $100 loaned for a term of 21 days. Find the APR charged by Pay it back. Round your answer to the nearest hundredth of a percent.

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