You are the accounting manager for Kool Ragz, Inc., a manufacturer of men's and women's clothing. The company needs to borrow $1,300,000 for 90 days in order to purchase a large quantity of material at "closeout" prices. The interest rate for such loans at your bank, Rimrock Bank, is 13% using ordinary interest. (a) What is the amount (in $) of interest on this loan? 2$ (b) After making a few "shopping" calls, you find that Southside National Bank will lend at 13% using exact interest. What is the amount (in $) of interest on this offer? (Round your answer to two decimal places.) $ (c) So that it can keep your business, Rimrock Bank has offered a loan at 12.5% using ordinary interest. What is the amount (in $) of interest on this offer?

You are the accounting manager for Kool Ragz, Inc., a manufacturer of men's and women's clothing. The company needs to borrow $1,300,000 for 90 days in order to purchase a large quantity of material at "closeout" prices. The interest rate for such loans at your bank, Rimrock Bank, is 13% using ordinary interest. (a) What is the amount (in $) of interest on this loan? 2$ (b) After making a few "shopping" calls, you find that Southside National Bank will lend at 13% using exact interest. What is the amount (in $) of interest on this offer? (Round your answer to two decimal places.) $ (c) So that it can keep your business, Rimrock Bank has offered a loan at 12.5% using ordinary interest. What is the amount (in $) of interest on this offer?

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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Simple 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.
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As a jewelry store manager, you want to offer credit, with interest on outstanding balances paid monthly. To carry receivables, you must borrow funds from your bank at a nominal 10%, monthly compounding. To offset your overhead, you want to charge your customers an EAR (or EFF%) that is 3% more than the bank is charging you. What APR rate should you charge your customers? Do not round intermediate calculations. Round your answer to two decimal places. %
You are the accounting manager for Kool Ragz, Inc., a manufacturer of men's and women's clothing. The company needs to borrow $1,500,000 for 90 days in order to purchase a large quantity of material at "closeout" prices. The interest rate for such loans at your bank, Rimrock Bank, is 15% using ordinary interest. (a) What is the amount (in $) of interest on this loan? (b) After making a few "shopping" calls, you find that Southside National Bank will lend at 15% using exact interest. What is the amount (in $) of interest on this offer? (Round your answer to two decimal places.) (c) So that it can keep your business, Rimrock Bank has offered a loan at 14.5% using ordinary interest. What is the amount (in $) of interest on this offer? (d) (Challenge) If Southside National wants to compete with Rimrock's last offer (part c) by charging $1,375 less interest, what rate (as a %), rounded to the nearest hundredths of a percent, must it quote using exact interest?
If you are attempting these questions ...then solve for both images
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