Foundations of Financial Management
16th Edition
ISBN: 9781259277160
Author: Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Publisher: McGraw-Hill Education
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Chapter 8, Problem 7P
Mary Ott is going to borrow
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Gustavo wants to borrow $900 for 20 days from a payday loan store. The payday loan finance charge is $12 per $100 borrowed up to $400, and $10 per 100 on the amount over $400. What is the dollar amount of interest I am paying? What is the APR of this loan?
Mary Ott is going to borrow $5,800 for 60 days and pay $159 interest.
What is the effective rate of interest if the loan is discounted?
Note: Use a 360-day year. Do not round intermediate calculations. Input your answer as
Effective rate on a discounted loan
%
Marcia Rodger borrowed $3,500 from Valley Bank at a rate of 9%. The date of the loan was October 10. Marcia hoped to repay the loan by February Assume the loan is based on ordinary interest. What will the interest cost be? How much will Marcia repay on February 10? What would the payback be if exact interest was used?
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Chapter 8 Solutions
Foundations of Financial Management
Ch. 8 - Under what circumstances would it be advisable to...Ch. 8 - Discuss the relative use of credit between large...Ch. 8 - Prob. 3DQCh. 8 - Prob. 4DQCh. 8 - Prob. 5DQCh. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Prob. 9DQCh. 8 - Prob. 10DQ
Ch. 8 - Prob. 11DQCh. 8 - Prob. 12DQCh. 8 - Compute the cost of not taking the following cash...Ch. 8 - Regis Clothiers can borrow from its bank at 17...Ch. 8 - Simmons Corp. can borrow from its bank at 17...Ch. 8 - Your bank will lend you $4,000 for 45 days at a...Ch. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Mary Ott is going to borrow $10,400 for 120 days...Ch. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10PCh. 8 - McGriff Dog Food Company normally takes 27 days to...Ch. 8 - Maxim Air Filters Inc. plans to borrow $300,000...Ch. 8 - Digital Access Inc. needs $400,000 in funds for a...Ch. 8 - Carey Company is borrowing $200,000 for one year...Ch. 8 - Randall Corporation plans to borrow $233,000 for...Ch. 8 - Prob. 16PCh. 8 - Your company plans to borrow $13 million for 12...Ch. 8 - If you borrow $5,300 at $400 interest for one...Ch. 8 - Zerox Copying Company plans to borrow $172,000 ....Ch. 8 - Prob. 20PCh. 8 - Mr. Hugh Warner is a very cautious businessman....Ch. 8 - The Reynolds Corporation buys from its suppliers...Ch. 8 - Prob. 23PCh. 8 - Neveready Flashlights Inc. needs $340,000 to take...Ch. 8 - Harper Engine Company needs $631,000 to take a...Ch. 8 - Summit Record Company is negotiating with two...Ch. 8 - Charming Paper Company sells to the 12 accounts...Ch. 8 - The treasurer for Pittsburgh Iron Works wishes to...
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- Suppose you borrow $21,000 from your bank to buy a car. You agree to pay $433.89 per month for 60 months. What is the interest rate (APR) for the loan?arrow_forwardI want to borrow $700 for ten days from a payday loan store. Here are the terms for the payday loan: "The payday loan finance charge is $12 per $100 borrowed up to $400, and $10 per 100 on the amount over $400." A. What is the dollar amount of interest I am paying? B. What is the APR of this loan?arrow_forwardTo payoff a loan of $1000 you need to make 40 payment of $36.56 per month. What rate of interest are you paying? What is the stated or quoted rate? What is the annual percentage rate? What is the effective annual rate? What rate is bank likely to use to state its rate?arrow_forward
- A man wants to borrow $1500 at 10% interest rate from October 1 through December 23. How much will he have to pay at the end of his loan term?arrow_forwardYou have two monthly car payments of $400 each left on your car. If the interest rate is 0.75 percent per month, how much will you be required to pay the lender if you wanted to pay off the loan today?arrow_forwardMelissa wants to check the accuracy of the finance charge on her promissory note. She has a $6,000, four-year loan at an APR of 3.11%. Round to the nearest cent. a. What is her monthly payment?arrow_forward
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- A man plans to take a vacation in 4 years. He wants to buy a certificate of deposit for $1200 that he will cash in for the trip. What is the minimum annual interest rate he must obtain on the certificate if he needs at least $1700 for the trip? Assume that the interest on the loan is computed using simple interest The rate he must obtain is ___%arrow_forwardA man plans to take a vacation in 5 years. He wants to buy a certificate of deposit for $1300 that he will cash in for the trip. What is the minimum annual interest rate he must obtain on the certificate if he needs at least $1500 for the trip? Assume that the interest on the loan is computed using simple interest. The rate he must obtain isarrow_forwardSuppose that you decide to borrow 13000 for a new car. You can select one of the following loans each requiring regular monthly payments. Installment loan A three-year loan at 5.9% Installment loan B five -year loan at 5.8% What would be the monthly payments for each loan and total interest for them also?arrow_forward
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