None Show steps to calculation with screenshots of excel!!! Consider a $5,000,000, 25-year ARM with monthly payments andannual interest adjustments. The initial interest rate is 6.5%. The index for the loan is 1-year US Government bonds,currently yielding 5%. The loan has a margin of 200 basis points. (a) Is the loan's initial interest rate a "teaser rate"?How do you know? (b) If 1-year T-bonds remain at 5%, what will be the applicable interest rate for this mortgage afterthe first year? (c) What are the initial monthly payments on this loan? (d) Assuming T - Bonds remain at 5%, what will bethe monthly payments after the first year? (e) Under that assumption (and assuming no discount points), what is theforecasted yield to - maturity on this loan at the time it is issued.

ARMs typically come with interest rate caps that limit how much the interest rate can adjust after…

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EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 14P

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In a discount interest loan, you pay the interest payment up front. For example, if a 1-year loan is stated as $42,000 and the interest rate is 8.50%, the borrower “pays” 0.0850 × $42,000 = $3,570 immediately, thereby receiving net funds of $38,430 and repaying $42,000 in a year. a. What is the effective interest rate on this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. What is the effective annual rate on a 1-year loan with an interest rate quoted on a discount basis of 18.50%? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Data Back-Up Systems has obtained a $10,000, 90-day bank loan at an annual interest rate of 15%, payable at maturity. (Note: Assume a 365-day year.) 1.How much interest (in dollars) will the firm pay on the 90-day loan? Format: 111.11 2.Find the 90-day rate on the loan. Format: 1.11% 3.Annualize your result in part b to find the effective annual rate for this loan, assuming that it is rolled over every 90 days throughout the year under the same terms and circumstances. Format: 11.11%
Data Back-Up Systems has obtained a $29,000, 90-day bank loan at an annual interest rate of 15%, payable at maturity. (Note: Assume a 365-day year.) a. How much interest (in dollars) will the firm pay on the 90-day loan? b. Find the 90-day rate on the loan. c. Annualize your result in part b to find the effective annual rate for this loan, assuming that it is rolled over every 90 days throughout the year under the same terms and circumstances. Answers a. The amount of interest on the loan is $___. (Round to the nearest cent.) b. The effective 90-day rate is___%. (Round to two decimal places.) c. The effective annual rate is___%. (Round to two decimal places.)
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You plan to apply for a loan from Bank of Kuala Lumpur. The nominal annual interest rate for this loan is 12.66 percent, compounded daily (with a 365-day year). What is the effective annual rate or EAR (annual percentage yield) of this loan? Round your answer to two decimal places in percentage form. Select one: A. 15.00% B. 13.00% C. 13.49% D. 12.66%
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I need the excel function typed out? Example =RATE???? G. Find the interest rate (APR) on a 27-year mortgage with a initial loan amount of $358,000, if the monthly payment is $2229.45 Let's use references for input values; and be sure to annualize the rate! INPUTS: OUTPUT: Period 27 Rate is APR Payment 2229.45 Loan amount 358000
Please use the information in Question 5 to answer this question. You have taken out a 1/1 ARM (the teaser rate is locked for 1 year, and after this 1-year initial period, interest rate begins to adjust per year) with the following loan terms: • Loan amount: $300,000 • Annual rate cap: 2% • Lifetime cap: 6% • Margin: 300 bps (3%) • Teaser rate (annual): 5% • Market index rate at the beginning of year 1: 5.5% • Market index rate at the beginning of year 2: 6.5% • Loan term in years: 30 years Q6: Please calculate the monthly payment for year 1 $1,703.37 O $2,306.74 O $1,264.81 $1,610.46 No answer within +/-$10.0 of the correct one
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Hi there, quick question. For an loan with a capital amount of 2500, initiation fee of 315, interest rate of 5%, initiation of loan takes place 04/01/2021 and first paid date is 02/02/2021 (Active for 29 Days), the calculated interest for this period was calculated to be 360.45. Interest is calculated using compound interest. Is there a way to work backwards to obtain the formula? To determine the accuracy.

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