You are considering two ways of financing a spring break vacation. You could put it on your credit card, at 14% APR,compounded monthly, or borrow the money from your parents, who want an interest payment of 9% every six months.Which is the lower rate? (Note: Be careful not to round any intermediate steps less than six decimal places.)The effective annual rate for your credit card is %. (Round to two decimal places.)

Dear student, kindly check the answer in the explanation box below.Explanation:Part 1: Answer:The…

Answered: You are considering two ways of…

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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Also find B) The effective annual rate for the loan from your parents is (Round to two decimal places.) C)The option with the lower effective annual rate is ?
Suppose you get paid every two weeks. You determine that you can afford to divert $80 from each check to pay for a car. Suppose you get approved for a loan with $80 biweekly payments over 6 years at an APR of 7%. What is the most expensive car you can afford to purchase with this loan? Note: In finance, biweekly means every two weeks. Hint: If you make payments every two weeks, how many payments do you make in a year
You have monthly interest rate of 1.65% and a balance on your credit card of 2000.00. If you paid the minimum payment of 50.00 each month: How much of the 50.00 would go towards interest? What PERCENTAGE would go towards reducing the principle (the balance)
You are considering two ways of financing a spring break vacation. You could put it on your credit card, at 15% APR, compounded monthly, or borrow the money from your parents, who want an interest payment of 8% every six months. Which is the lower rate? (Note: Be careful not to round any intermediate steps less than six decimal places.)
Also find b) The effective annual rate for the loan from your parents is %. (Round to two decimal places.) C) The option with the lower effective annual rate is
You have $5,000 on a credit card that charges a 19% interest rate. If you want to pay off the credit card in 3 years, how much will you need to pay each month (assuming you don't charge anything new to the card)?.
You ran a little short on your spring break vacation, so you put $1,000 on your other credit card. You can afford only the minimum payment of $60 per quarter. The interest rate on the credit card is 18 per year compounded quarterly. How many years will you need to pay off the $1,000?
A bank charges you, the credit card holder, 13.24% compounding monthly. Imagine that you have accumulated debt in an amount of $4,000. Your credit card statement shows a minimum monthly payment of $20.00. Assuming you wise up and realize that you better pay off your debt before charging on your card again, how long would it take to pay off the debt completely if you were to make the minimum payments? How long would it take if you were to make a monthly payment of $50.00?
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You are considering two ways of financing a spring break vacation. You could put it on your credit card, at 14% APR, compounded monthly, or borrow the money from your parents, who want an interest payment of 10% every six months. Which is the lower rate? (Note: Be careful not to round any intermediate steps less than six decimal places.) The effective annual rate for your credit card is ____%. (Round to two decimal places.)
You are planning for your future by depositing lump sum into a time deposit account, what amount must be deposited at the present time so that you can withdraw $600 monthly for 5 years, with the first withdrawal scheduled for 5 years from today? The bank offers you 0.5% interest monthly. (Hint: Monthly withdrawals start at the end of the month 60).
Suppose your Visa credit card charges an APR of 13.5%, compounded monthly and your current statement shows a balance of $758.50.a) If you make no payments and no additional purchases for one year, what will bethe amount owed at the end of that year?b) How much total interest will be paid?c) What is the nominal rate?d) What is the effective annual rate (EAR)?e) Suppose this credit card company requires a minimum monthly payment of $25.Assuming that no additional purchases are made and also assuming that this minimum amount is paid every month, prepare an amortization schedule for the first three months of payments.

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