Your company borrowed $50,000 from a bank and have agreed to pay the principal back by making monthly payments of $1,685.50 for 3 years (36 months). What is the ANNUAL interest rate for this loan? O 12.00% O 13.03% O 3.02% O 15.14% 9.87% O 1.99% O 5.49% O 2.09%

Your company borrowed $50,000 from a bank and have agreed to pay the principal back by making monthly payments of $1,685.50 for 3 years (36 months). What is the ANNUAL interest rate for this loan? O 12.00% O 13.03% O 3.02% O 15.14% 9.87% O 1.99% O 5.49% O 2.09%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: How would we compute the present discounted value of payments of $8,000 received three years in the…

A: The present discounted value gives the amount of dollars that an individual is willing to invest for…

Q: Juan is 25 years old today. A year from now (i.e., on his 26th birthday) he will deposit $7,000 in a…

A: Compound interest is calculated by multiplying the initial principal amount by one plus the annual…

Q: $5000 at time 0 is equivalent to: Select one: a. $7800 at the end of year 7, i=8% simple interest…

A: Answer: option c Explanation: Let us find the present value (value at time zero) of $6800 to see…

Q: You have a bank deposit now worth P5000. In how many years will it take for your deposit to be worth…

A: FV = 8,000 PV = 5,000 Interest rate = 2.5% quarterly

Q: 7. It is said that the following cash flows are equivalent at an annual 10% interest rate. Determine…

A: Here we calculate the value of W by using the both cashflow , so the calculation of the following by…

Q: D Question 5 You expect to receive the following $4,448 $22.900 at the end of each year for 12 years…

A: * SOLUTION :- (5) Given that , i = 8% n= 12

Q: What is the equivalent of a current deposit of $32,000.15 years from now at 8.5% interest compounded…

A: Current deposit account is a type of savings deposit with no deposit term specified. It can be used…

Q: You have taken a loan of $300,000 loan over 12 years at a 3% interest rate compounded monthly, which…

A: Present value is the value of investment in today's dollar. Future value is the value of investment…

Q: A man wishes to provide a fund for his retirement such that from his 60th to 70th birthdays he will…

A: The present value can be defined as the amount invested in order to realize the future value. Future…

Q: Convert 16% compounded monthly to equivalent nominal rate which compounded bi-monthly.

A: i = 16% COMPOUNDED MONTHLY r = ?

Q: How much would be in your account in 8 years after depositing $2000 now? The annual interest rate is…

A: Calculate the future value as shown below Therefore, the correct option is (d)

Q: A contractor bought a concrete mixer at P 140,000 if paid in cash. The mixer may also be purchased…

A: Annuities can be defined as payments made at equal intervals of time. The installments that are paid…

Q: A bank has agreed to lend you $840,100 for a home loan. The loan will be fully amortized over 52…

A: Prepaid interest refers to an interest that the borrower pays for the loan before its scheduled…

Q: • An electronic appliance is payable P1,000,12% compounded continuously. How much is the product…

A: Given Principal amount = 1000. Interest rate = 12% r = 0.12 Time = 10 years. And compounded…

Q: In case you deposit $1,500 every year for 15 years in a savings account that earns 15% compounded…

A: Given:Interest rate (r) = 15%No of years (n) = 15Annual payment amount (PMT) = $1500Payment due: At…

Q: A man deposited P5,000 in a bank at a rate of 10 % per annum for 3months and 25days. Find the…

A: Given: Amount=P 5000 rate=10% Time=3 months 25 days Note: Due to multiple questions being posted,…

Q: In case you deposit $1,500 every year for 15 years in a savings account that earns 15% compounded…

A: Future value of cash refers to its value on a specific date in the future with the given rate of…

Q: Calculate the effective rate of 9 months at 2.44%, then 51 months at 3.13%?

A: “Since you have posted multiple questions, we will provide the solution only to the first question…

Q: Suppose that you barrow 10,000 AED at 1% compounded interest, the the total amount to pay in five…

A: Here we calculate the amount pay in five year by using the given details and choose the correct…

Q: A house and lot can be acquired by a down payment of P500,000 and a yearly payment of P100,000 at…

A: Answer Down payment = P 500000 Annual payment = P 100000 Number of annual payments = 10 Discount…

Q: QUESTION 9 What is the effective monthly interest rate considering an APR of 6% compounded…

A: Compounding refers to the process of adding earned interest to the principal amount of an investment…

Q: Identify the following interest rates as nominal or effective: (ABET, SO1) A: 1%= 6% per semiannual,…

A: When comparing the nominal interest rate and effective interest rate, the primary difference between…

Q: Suppose you make equal quarterly deposits of $1,000 into a fund that pays interest a rate of 16% per…

A: One of the most crucial economic concepts, FV is based on the time value of money. Investors must be…

Q: 9. In how may months will a loan of P2.M be paid if the monthly payment is P94,146.94? Select the…

A: Loan amount=2000,000 Monthly payment= P94,146.94

Q: What is the present equivalent (at EOY 0) of the following cash-flows if the annual interest rate is…

A: The present value of the cash flow is the present worth of cash now that will be received in the…

Q: How much money be invested today in order to withdraw P1500 per year at the end of each year for 8…

A: Given :Number of Periods/Years (n) = 8Rate of Interest (r) =8%Regular Withdrawal (A) = $ 1500 PV =…

Q: Carol is applying for a mortgage She has a monthly gross income of $4800. The home she would like to…

A: The front-end ratio is a ratio that shows how much of a person's income goes towards paying their…

Q: In order to buy an apartment unit, Meryl needs to spend a total of $550,000 today and equal monthly…

A: Formula of the future value for the one time payment: F = P (1 + R/n)n*t Where: F : Future value P…

Q: A man borrowed P12,000 at a discounted rate of 12.5% pa and agreed to pay the loan in one year. What…

A: Formula of effective interest rate = ( 1 + i/n)n -1 Where i = nominal interest rate = 12.5% =0.125…

Q: You are currently thinking about setting up a retirement fund. You want to deposit $4000 every year…

A: Future value refers to the value of the money that an original investment will increase, over time,…

Q: a, You put $1000 dollars into a savings account at your local credit union which has simple…

A: a) According to question given that An amount of 1000 is invested in saving account with 2% annual…

Q: What is the nominal annual interest rate if the effective annual rate is 8.1% and compounding is…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: How much will a $27,000 investment today be worth in 7 years if it earns 6.0% annual compound…

A: Principal amount is 27000 which is invested for 7 years at the rate of 6%

Q: QUESTION 4 Suppose you invest $150.000 dollars in a savings account that earns 9% compounded…

Q: A lot in Cainta Rizal can be acquired at a down payment of P200,000 and a yearly payment of P30,000…

Q: 2. Find the present worth of perpetuity of P 15,000 payable monthly if money is worth 10% compounded…

A: Given information Monthly payable amount=P15000 Annual interest rate=10% Payment period=12…

Q: The nominal annual Interest rate, compounded semi-annually, for a bank with an effective annual…

A: Answer: 30.10% The effective annual interest rate is the real return on a loan or a saving account,…

Q: Assume there is a bond with the coupon rate of 15.2%, yield to maturity (YTM) of 9.4%, and with the…

A: Present value is the value of investment in today's dollar. Future value is the value of investment…

Q: 55. Find the accumulated amount of P1,000.00 after 7.5 years when deposited in a bank at the rate of…

A: Answer is given below

Q: 28. How much should be deposited in a bank at the rate of 5% compounded continuously for 5 years if…

A: In this question we have to find out the amount deposits in a bank of the above information.

Q: accounts. How much will Mr. Jones have in his savings account in thirteen years if $50,000 is put in…

Q: How long in years will a certain sum of money to doubles its amount when deposited at a rate of 4%…

A: Formula for bi-monthly compounding is A = P(1 + (r/6) )6t

Q: An IT man buys boxes of diskettes and is to pay for it by making 30 monthly payments of P50 each,…

A: Number of period : 30 Monthly payments: 50 Yearly interest rate : 6 % Monthly interest rate : 0.005

Q: A $1,000 bond pays an interest of $50 each year for 20 years. The bond will mature at the end of 20…

A: here we calculate the rate of return , investor receive by calculating the given cashflow , and…

Question

Your company borrowed $50,000 from a bank and have agreed to pay the principal back by making monthly
payments of $1,685.50 for 3 years (36 months). What is the ANNUAL interest rate for this loan?
O 12.00%
O 13.03%
O 3.02%
O 15.14%
9.87%
O 1.99%
O 5.49%
O 2.09%

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define simple & compound interest

VIEW

Step 2: Calculate annual interest rate

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 11 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

What effective interest rate per quarter is equal to the nominal 7% per month compounded continuously? Select one: O a. 5.13 O b. 22.14 О с. 7.25 O d. 23.37 О е. 16.18
Suppose that you obtain a mortgage loan of 100.000 TL. Annual rate of interest is 12% and the maturity of the loan is 8 years. You pay annual installments. Now. suppose that you will pay a lumpsum amount of 20.000 TL at maturity to settle the loan. What would be the periodic payment amount? O 16.504,23 TL O 17.504,23 TL O 18.504,23 TL O 19.504,23 TL O Diğer:
Suppose that you make a series of annual deposits into a bank account that pays 10% interest. The initial deposit at the end of the first year is $1,200. The deposit amounts increase by $300 in each of the next 4 years. How much would you have immediately after the 5th deposit? O s10,642.42 O $9,000.00 O $11,705.56 O $8,925.12
help
If you pay P 650 at the end of each month for 30 years on account that pays interest at 12% compounded monthly, how much money do you have after 30 years? O P5,271,726.69 O P3,271,726.69 O P2,271,726.69 O P4,271,726 69
2.5. What equal-payment series is required to repay the following present amounts? a. $10,000 in 4 years at 10% interest compounded annually with 4 annual payments. b. $5,000 in 3 years at 12% interest compounded semiannually with 6 semiannual payments. c. $6,000 in 5 years at 8% interest compounded quarterly with 20 quarterly payments. d. $80,000 in 3o years at 9% interest compounded monthly with 360 monthly payments.
please help solve
QUESTION 4 Al approximately what interest rate, i, will a present investment of $2000 increase to a future value of S3500 in 8 years? O 7% O 9% O 3% O 5%
Fatma is quoted a nominal interest rate of 9.15% per annum compounded every four months on her investment of $1,200, the effective rate per annum is: O 9.43% 10.25% O 9.47% O 10.15% O 9.00%
A loan of $245,000 is to be repaid in equal quarterly payments ovr a period of 6 years. if the interest rate in 14.5 compounded quarterly, what is the amount of unpaid principal at the beginning of the third year Oa S148,281 Ob. S147.044. Oc $247325 Od. SI84.203 O SI85.206
Hero borrowed P 200,000.00 with interest at the rate of 5% compounded semi-annually. He agrees to discharge his obligation by paying a series of 8 equal semi-annual payments, the first being due at the end of 5 1/2 years. Find the semi-annual payment. O a. P50,043.00 O b. P50,340.00 O c. P50,403.00 d. P50,430.00
An investment on a machinery can yield following cash flow for 8 years and in the end of the 8th year resale value will be 15,000 dollars. How much can be invested on this machinery at the present time, considering the interest rate of 10% compounded annually. Please explain your work in detail. C-? 1-2000 1-2000 -2000 -2000 -1000 -1000 1-1000 -1000 L-$15,000 2. 4. 7. C: Cost, I: Income, L: Salvage Value