ackson Industries has borrowed $125,000 under a line-of-credit agreement. While the company normally maintains a checking account balance of $15,000 in the lending bank, this credit line requires a 20% compensating balance. The stated interest rate on the borrowed funds is 10%. 1.What is the effective annual rate of interest on the line of credit? Format: 11

Q: On 1/1, $400,000 of specific accounts receivable of Annie's Animal Shop are assigned as collateral…

A:

Q: Colson Company has a line of credit with Federal Bank. Colson can borrow up to $370,500 at any time…

A: Line of credit or LOC is a flexible arrangement between a bank and a customer, wherein a customer…

Q: The Blake Company has an outstanding bank loan of P400,000 at an interest rate of 12%.  The company…

A: An interest rate is defined as the proportion of an amount loaned which a lender charges as interest…

Q: Brothers Corporation borrows P70,000.00, annual interest rate of 19% is deducted in advance. What is…

A: Gross borrowing = P 70,000 Interest advance deduction = 19%

Q: Royal Bank charges administration fees of 2.9% of the loan amount per annum. Target Corporation has…

A: Here,Administration Fees (f) is 2.9%Negotiated Interest Rate (BR+m) is 10.5%Compensating Balance (b)…

Q: terprise ABC has contracted a credit for the amount of 300 000 zlotys. The credit is to be 5 equal…

A: In this we need to calculate the effective cost of credit.

Q: Carey Company is borrowing $375,000 for one year at 12.5 percent from Second Intrastate Bank. The…

A: The effective rate is the nominal rate after making adjustments for the frequency of interest in a…

Q: Wayne signed a $10,000 note at Lynn Bank that charges a 7% discount rate. Use ordinary interest. If…

A: 7% discount rate is for 150 days.  1. To calculate proceeds, deduct interest from signed amount.  2.…

Q: Martinez Sporting Goods borrows $4,500, at 5% interest, for 120 days. Use the exact interest method…

A: Interest amount is the fixed amount that the lender will charge for lending some amount for certain…

Q: Sunland Contractors borrowed $1.65 million at an APR of 7.0 percent. The loan called for a…

A: Effective rate on loan is the actual rate of interest paid, taking into account the compensating…

Q: Drake Corporation takes out a term loan payable in 12 year-end annual installments of P5,000 each.…

A: Annual payment (P) = P 5000 Interest rate (r) = 14% Number of annual payments (n) = 12

Q: Bank ABC offers loan terms at 12.25% APR compounded daily, while Bank XYZ offers loan terms at…

A: Bank ABC offer:- Nominal interest rate is 12.25% Compounding frequency is 365(Daily) Bank XYZ's…

Q: What is the outstanding balance of the loan after the 2nd year

A: Compound interest is the amount of interest charged on interest. In this method the interest…

Q: Hernandez Engineering borrows $5,500, at  6 1 2 %  interest, for 150 days. If the bank uses…

A: Detailed explanation:1. Principal amount borrowed: $5,500  Interest rate: 6.12% (converted from…

Q: ABC Company acquired a loan from New Kensington Bank in the amount of $120,000 with a 8% interest…

A: The question is related to Effective Interest rate. The details given are Amount of loan =…

Q: Royal Company holds a loan with an interest rate of 7.00% compounded semi-annually. Calculate the…

A: Effective interest rate also known as the annual equivalent rate, is an interest rate on a loan or…

Q: A corporation arranges for a $10 million line of credit. The corporation needs to have regular…

A: Note: The options provided are incorrect, I have provided the solution with answer. Please recheck…

Q: H. CANSY Merchandising borrowed P800,000 from ABC Bank at 10% simple interest or one year and six…

A: H) Amount borrowed (A) = P 800000 r = 10% simple interest rate n = 1 year 6 months = 1.5 years

Q: A $7,500.00 demand loan was taken out on March 4 at a fixed interest rate of 7.66% with fixed…

A: In demand loans, the lender has the right to "call" the loan, demanding full repayment immediately…

Q: lender engages in a 15-day $1,000,000 reverse repo at a rate of 2.50%. The haircut is 2%. The…

A: In a reverse repo, the borrower will have to will give the collateral to lender and the lender will…

Q: Ghana Company enters into an IRG arrangement with Meterbank for 9 months, P800,000 loan starting 3…

A: IRG means interest rate guarantees. This is an option contract which helps an individual or a firm…

Q: Your company has just taken out a 1-year installment loan for $72,500 at a nominal rate of 11.0% but…

A: First we need to use loan amortization formula below to calculate monthly payment.  where P=Loann…

Q: Jhar Industries has borrowed $125,000 under a line-of-credit agreement. While the company normally…

A: Borrowed Amount is $125,000 Amount to be maintained in lenders account is $15,000 Compensating…

Q: The annual percentage rate of interest is

A: The annual percentage rate (APR) is the true cost of borrowing money, including the interest rate…

Q: The simple interest charged on an 8-month loan of $95,000 is $974. Find the simple interest rate.…

A: Simple interest = Amount*Rate*time in years

Q: A bank gives6-month 7.2% interest rate compounded monthly(the interest rate is that the bank applies…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: Mobile Co. issued a $43,384, 60-day, discounted note to Guarantee Bank. The discount rate is 11%. At…

A: Discounting of note means when note is transferred from company to bank and bank will deduct…

Q: Current Attempt in Progress The Cullumber Bank requires borrowers to keep an 10 percent compensating…

A: Amount to be borrowed = $480,000Compensating balance = 10%Stated APR = 8%

Q: The interest rate on a $100,000 loan is 7.2% compounded semiannually. The monthly payments on the…

A: To Find: Interest component of payment 221 Principle component of payment 156 Final Payment

Q: Nelson Co. issued a $80,000, 90-day, discounted note to Community Bank. The discount rate is 5%. At…

A: Solution: As note is already a discounted note, therefore at maturity borrower will pay face amount…

Q: Determine the annual financing cost of a 1-year (365 day), $13,000 discounted bank loan at a stated…

A: Compound = 365 days Loan amount = a = $13,000 time = t = 1 * 365 = 365 days Interest rate = r = 9 /…

Q: Central Auto Parts borrowed $550,000 at 9% interest on July 10 for 140 days. (a) If the bank uses…

A: Interest refers to the cost of borrowing money, usually expressed as a percentage of the amount…

Q: State Bank made a loan at 12% interest for 360 days. If the amount of interest was $931.80, use the…

A: The objective of the question is to find the principal amount borrowed from the bank using the…

Q: for an $8000 loàn. Which option should the customer choose to pay the least amount of interest? a.…

A:

Q: SureWin Company owes an amount of debt to a bank and the bank proposed the following annual payments…

A: The Present Value of a cash flow series: The present value of a cash flow series is calculated as…

Calculating the Return On A Loan