ABC Corporation will be acquiring a P3,000,000 face value loan three months from now. It entered into an IRG 3-6 to set the interest rate of the loan to 8%. It paid P20,000 for the IRG. With this contract, what is the maximum simple effective interest rate relating to loan?
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Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
ABC Corporation will be acquiring a P3,000,000 face value loan three months from now. It entered into an IRG 3-6 to set the interest rate of the loan to 8%. It paid P20,000 for the IRG. With this contract, what is the maximum simple effective interest rate relating to loan?
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- Lugia Bank granted a P4,000,000 loan to Ho-oh Company on January 1, 2020. The annual interest of the loan is 12% payable semi-annually. The loan matures in two years. The effective interest rate on the loan is 16%. (Round off present value factors up to four decimal point; only round off up to two decimals the final value) Questions: 1. What is the initial carrying amount of the loan? 2. How much is the interest income for the year 2020? 3, What is the balance of the discount on the loan as of December 31, 2020?ABC Company enters into an IRG arrangement with Ch-bank for a 9 months, P800,000 loan starting 3 months from now. The IRG rate is at 11% and the bank quotes a premium of P4,000. Compute for the effective interest rate if the actual interest rate 3 months from now is 8% . Show your solution.Use the following information for the next two questions:On January 1, 20x1, ABC Co. obtained a five-year, ₱1,000,000 variable-rate loan with interest paymentsdue at each year-end and the principal due on December 31, 20x5.As protection from possible fluctuations in current market rates, ABC Co. enters into an interest rateswap for the whole principal of the loan. Under the agreement, ABC Co. shall receive variable interestand pay fixed interest based on a fixed rate of 8%. Swap payments shall be made at each year-end.The following are the current market rates: Jan. 1, 20x1 8% Jan. 1, 20x2 9% Jan. 1, 20x3 12% 62. How much is the fair value of the interest rate swap on December 31, 20x1? (Indicate whether it is aderivative asset or liability.)a. 32,397 assetb. 32,397 liabilityc. 46,884 assetd. 53,223 liability63. How much is the fair value of the interest rate swap on December 31, 20x2? (Indicate whether it is aderivative asset or liability.)a. 83,294 assetb. 83,294…
- On Jan. 31, 2022, ABC Corp. agreed with the bank a P5,000,000 loan to be credited to ABC on May 1, 2022. The prevailing interest rate on Jan. 31 was 7% but they also entered into a forward rate agreement (FRA) 3-12 to set the interest of the future loan at 8%. The actual interest rate on May 1 was 10%. How much is the interest expense of ABC for the whole term of the loan?On Jan. 31, 2022, ABC Corp. agreed with the bank a P5,000,000 loan to be credited to ABC on May 1, 2022. The prevailing interest rate on Jan. 31 was 7% but they also entered into a forward rate agreement (FRA) 3-12 to set the interest of the future loan at 8%. The actual interest rate on May 1 was 10%. How much is the cost savings/(incremental cost) attributable to the FRA?Zara Corporation borrowed RM100,000 from their bank for one year. The bank required the company to pay RM9,500 in interest at the end of the year plus maintain a minimum balance of RM10,000 with the bank in a chequing account throughout the year. What is the effective interest rate on this loan?
- Garantea Company enters into an IRG arrangement with Metrobank for 9 months, P800,000 loan starting 3 months from now. The IRG rate is at 11% and the bank quotes a premium of P4,000. Compute for the effective interest rate if the actual interest rate 3 months from now is 8%G Company enters into an IRG arrangement with M bank for a 9 months, P800,000 loan starting 3 months FROM NOW. The IRG (interest rate guarantee) rate is at 11% and the bank quotes a premium of P4,000. Compute for the effective interest rate if the actual interest rate 3 months from now is 8%Ghana Company enters into an IRG arrangement with Meterbank for 9 months, P800,000 loan starting 3 months from now. The IRG rate is at 11% and the bank quotes a premium of P4,000. Compute for the effective interest rate if the actual interest rate 3 months from now is 8%
- Suppose you take a 3/1 interest-only ARM for $100,000, monthly payments, 30-year term. The initial contract rate is 4.00% and the contract rate for year 4 is 6.50%. What is the balance of the loan at the end of year 4? 94,892.15 98,591.88 96,483.13 95,347.22Megabank granted an 8% 3-year loan to Global Company on January 1, 2018. The interest on the loan is payable every December 31. Megabank incurred P148,122 of direct origination cost but an origination fee of P300,000 was charged against Global Company. The effective rate on the loan as a result of the origination fee and cost is now 9%. What is the amortized cost of the loan on December 31, 2019 in Megabank's accounting book ?SportZ has negotiated a loan of $25 000 with interest at 7.6% per annum, to be paid as month-end payments of $2200.00 over the next year. Construct a loan amortization schedule to answer the following questions. i. How much interest is paid over the first two months? ii. How much of the principal is paid by the end of the first two months? iti. How much interest is paid over the term of the loan? iv. What is the amount of the final payment?]