ended up with two plans which are Plan A and Plan B. She could get enough cash through Plan A that uses simple interest promissory note which offers RM25,000 for 180 days with a simple interest rate of 10% per annum. On the other side, Plan B also offers RM26,000 with a bank discount loan of 11% for 180 days. i. Compare the value of interest in Plan A with the bank discount amount in Plan B. ii. Calculate the amount received by Maria in each plan. iii. Compute the maturity value for each plan.

ended up with two plans which are Plan A and Plan B. She could get enough cash through Plan A that uses simple interest promissory note which offers RM25,000 for 180 days with a simple interest rate of 10% per annum. On the other side, Plan B also offers RM26,000 with a bank discount loan of 11% for 180 days. i. Compare the value of interest in Plan A with the bank discount amount in Plan B. ii. Calculate the amount received by Maria in each plan. iii. Compute the maturity value for each plan.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Jassim is a Credit Officer with Riffa Bank and is working on structuring a loan facility for his client. The Bank uses Return on Net Funds Employed to price its loan: Bank policy dictates that loans must generate an 10%6 Rate of Return. Additional loan expenses on this facility will be BHD5,000. How much will Riffa Bank earn from a BHD300,000 loan for 1 year. O a. BHD 30,000 O b. BHD35,000 O C. BHD 40,000 O d. BHD 50,000
Jamila wants to deposit OMR 5000 in a bank fixed deposit for 8 years. She has the following bank deposit options: a) Bank Muscat on maturity will give you OMR 6700. b) Bank Dhofar on maturity will give you OMR 6720. c) National Bank on maturity will give you OMR 6750. d) Help Jamila to find as to what rate of interest bank is offering
11. Syamsina needs RM3,500 now.Find the amount the she should borrow for 200 days from a bank that charges 8.5% bank discount rate.(RM3673.47)
Amir needs 12000 to get his business started as soon as possible. He decides to take a loan from a bank. If the amount of bank discount is 354.15, find the amount of the loan.
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The left bank is offering CDs at 5%. The right bank is offering a money market account at 4%. If I have a total of $10,000 to invest in these accounts and want a return (accrued interest) on my money of $436 from both accounts at the end of one year, how much should I put into each account? Fill in below with the information to set up the system of equations: State your answer in complete sentences. $ put into CD account(________) + $ put into money market(_________) = Total $$ invested(__________) CD interest Money(_________) + Money market interest(________)=Total interest(__________)
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3. Suppose you dopiest SR 5000 in currency into your checking account at a branch of Al-Rajhi Bank, which we will assume that the required reserve ration is %10. a. Use a T-account to show the initial effect of this transaction on Al-Rajhi's balance sheet. b. Suppose that Al-Rajhi Bank makes the maximum loan it can from the fund you deposited. Use a T-account to show the the initial effect of this transaction on Al- Rajhi's balance sheet. Also include in this T-account the transaction from part (a). c. Now suppose that whoever took out the loan in part (b) writes a check for this amount and that person receiving the check deposit in Alinma Bank. Use a T-account to show the the initial effect of this transaction on Alinma's balance sheet.
Hannah is exploring savings options from several different banks and has settled on one of the financial products offered by Bank A. Calculate the effective annual interest rate for Hannah given that the nominal annual interest rate is 3% p.a. Note that the nominal interest rate is compounded monthly. Additionally, Bank B is offering the same product with an effective interest rate of 5.5% p.a. Given this, would Hannah be better off saving with Bank A or Bank B? Justify your answer.
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Formulate a system of equations for the situation below and solve. Michael Perez has a total of $2900 on deposit with two savings institutions. One pays interest at the rate of 6% / year, whereas the other pays interest at the rate of 8% / year. If Michael earned a total of $212 in interest during a single year, how much does he have on deposit in each institution? at 6%/year $ at 8%/year $
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