Assume you take out a car loan of $7,700 that calls for 60 monthly payments of $210 each. a. What is the APR of the loan? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Use a financial calculator or Excel. Annual percentage rate % b. What is the effective annual interest rate on the loan? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Effective annual rate %

Assume you take out a car loan of $7,700 that calls for 60 monthly payments of $210 each. a. What is the APR of the loan? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Use a financial calculator or Excel. Annual percentage rate % b. What is the effective annual interest rate on the loan? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Effective annual rate %

Fundamentals of Financial Management (MindTap Course List)

14th Edition

ISBN:9781285867977

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter5: Time Value Of Money

Section: Chapter Questions

Problem 27P: EFFECTIVE VERSUS NOMINAL INTEREST RATES Bank A pays 4% interest compounded annually on deposits,...

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Assume you take out a car loan of $8,600 that calls for 48 monthly payments of $300 each. a. What is the APR of the loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Use a financial calculator or Excel.) b. What is the effective annual interest rate on the loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
EFFECTIVE VERSUS NOMINAL INTEREST RATES Bank A pays 4% interest compounded annually on deposits, while Bank B pays 35% compounded daily. a. Based on the EAR (or EFF%), which hank should you use? b. Could your choice of banks be influenced by the fact that you might want to withdraw your funds during the year as opposed to at the end of the year? Assume that your funds must be left on deposit during an entire compounding period in order to receive any interest.
A design studio received a loan of $6,850 at 6.20% compounded semi-annually to purchase a camera. If they settled the loan in 2 years by making quarterly payments, construct the amortization schedule for the loan and answer the following questions: a. What was the payment size? $0.00 Round to the nearest cent b. What was the size of the interest portion on the first payment? a $0.00 0 SUBMIT QUESTION SAVE PROGRESS SUBMIT AS
Business Math Worksheet 8.2: Installment loans-Amount Financed Name Background: An installment loan is repaid in several equal payments over a specified period of time. Usually, you make a down payment to cover a portion of the cash price of the item. The amount you finance is the portion of the cash price that you owe after making the down payment. Amount Financed = Cash Price - Down Payment Down Payment = Cash Price x Percent 1. Flora Quinton is buying a new air compressor for her auto repair shop. It sells for $1,299. She makes a down payment of $199 and finances the remainder. How much does she finance? 2. Beatriz Ruiz is buying new office furniture. It sells for a cash price of $2,358.60. The down payment is $200.00. What is the amount financed 3. An office remodeling project costs $15,880. If you pay $3,680 towards the project, how much do you finance?
question 6 A loan is offered with monthly payments and a 9.25 percent APR. What’s the loan’s effective annual rate (EAR)? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Effective annual rate %
You borrow money on a self liquidating installment loan (equal payments at the end of each year, each payment is part principal part interest) Loan amount Interest Rate $632,000 15.5% Life 49 years Date of Loan January 1, 2021 Use the installment method - not straight line Do NOT round any interrmediate numbers. Do NOT turn this into a monthly problem. Do NOT put in minus signs, answer all positive numbers.
Question A .Consider the following series of payments which start at time t = 0: 5, 7, 9, 11... What is the value of this series of payments at time t = 6? Effective annual interest rate is 8% p.a. Question 7Select one:Select one: A. 92.68 B. 122.44 C. 68.72 D. 103.28 Full explain this question and text typing work only We should answer our question within 2 hours takes more time then we will reduce Rating Dont ignore this line
Problem 4-20 Spreadsheet Problem: Solving for Rates (LG4-7) What annual rate of return is implied on a $2,500 loan taken next year when $6,000 must be repaid in year 6? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Annual rate of return %
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Saved Big Dom's Pawn Shop charges an interest rate of 25.5 percent per month on loans to its customers. Like all lenders, Big Dom must report an APR to consumers. a. What rate should the shop report? (Do not round intermediate calculations.) b. What is the effective annual rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. APR b. EAR
Finding the Interest Rate: Concept Connection Example 6-3 (page 237) 18. What interest rates are implied by the following lending arrangements? a. You borrow $500 and repay $555 in one year. b. You lend $1,850 and are repaid $2,078.66 in two years. c. You lend $750 and are repaid $1,114.46 in five years with quarterly compounding. d. You borrow $12,500 and repay $21,364.24 in three years under monthly compounding. (Note. In parts c and d, be sure to give your answer as the annual nominal rate.) Lasher, William R.. Practical Financial Management (Page 276). South-Western College Pub. Kindle Edition.
4. Interest Rate Oliver has the following outstanding balances: Balance ($) Form of Credit Bank Loan Credit Card A Credit Card B a. 6686.98 765.39 1028.14 7.2% compounded monthly 20.99% compounded daily 17.5% compounded daily Monthly Payment $300 Minimum payment of $50 Minimum payment of $30 Length to Pay off Use the last column to determine how long it will take for Oliver to pay of each balance if he pays the (minimum) monthly payment. Show relevant calculations below. b. Suppose Oliver consolidates his loan and credit card balance by using a line of credit to pay off each debt. The line of credit has an interest rate of 7.5%, compounded monthly. If Oliver makes payments of $380, how long will it take to be debt free? c. How much interest would he save by consolidating his debt?