Boatler Used Cadillac Co. requires $850,000 in financing over the next two years. The firm can borrow the funds for two years at 12 percent interest per year. Ms. Boatler decides to do forecasting and predicts that if she utilizes short-term financing instead, she will pay 7.75 percent interest in the first year and 13.55 percent interest in the second year. Assume interest is paid in full at the end of each year.  What is the short term variable rate?

Teal and Associates needs to borrow $65,000. The best loan they can find is one at 12% that must be repaid in monthly installments over the next  5 1/2 1 2  years.  How much are the monthly payments? (a) State the type. A. ordinary annuityB.sinking fund    C.present valueD.amortizationE.future value (b) Answer the question. (Round your answer to the nearest cent.)

Professor Wendy Smith has been offered the following opportunity: A law firm would like to retain her for an upfront payment of $50,000. In return, for the next year the firm would have access to eight hours of her time every month. As an alternative payment arrangement, the firm would pay Professor Smith's hourly rate for the eight hours each month. Smith's rate is $540 per hour and her opportunity cost of capital is 16% per year. What does the IRR rule advise regarding the payment arrangement? (Hint: Find the monthly rate that will yield an effective annual rate of 16%.) What about the NPV rule? The annual IRR is %. (Round to two decimal places.)

An auto dealer has designed a marketing gimmick. They are asking their customers tinky only $109 at the end of each month, for the first two years for a car priced at $10,000. The APR on the vehicle is 5.40% and the total term of the loan is 5 years. What is the monthly payment for the remaining three years? Interest is payable during the entire five year period.

Qualifying Scenario: Rosanne is buying a home for 900k. She has 110k in liquid assets, a 740 middle credit score, $1200 a month in revolving credit card debt and makes 200k a year. Her lender requires her to have a 90% LTV, 30/43 DTI ratios and 2 months PITI for PCL. The loan will be a 30 year fixed with a 3% interest rate. Her closing costs will be 15k. Escrows will be $1000 a month. She can buy her interest rate down by .125% by paying a half percent discount point. A .25 buy down costs 1 points and so on. She can increase her rate by .125% to get a lender credit of a half point or .25% for 1 point and so on. Does she qualify? If not, why? What can she do to qualify?