Suppose that a company borrows 20,000 for 1 year at a stated rate of interest of 9 percent. What is the annual percentage rate (APR) if interest is paid to the lender in annually? semiannually? quarterly?
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A:
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Q: Chapter 7 Self Test Problem #2
A: Formula:
Q: Assume you have secured a loan of $10,000 from a bank which will be paid in one year. The bank has…
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Suppose that a company borrows 20,000 for 1 year at a stated rate of interest of 9 percent. What is the annual percentage rate (APR) if interest is paid to the lender in annually? semiannually? quarterly?
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- If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?What is the effective annual rate (EAR or EFF%)? What is the EFF% for a nominal rate of 5%, compounded semiannually? Compounded quarterly? Compounded monthly? Compounded daily? Construct an amortization schedule for a $1,000, 12% annual rate loan with 4 equal installments. What is the annual interest expense for the borrower, and the annual interest income for the lender, during Year 2? Suppose on January 1 you deposit $1000 in an account that pays a nominal, or quoted, interest rate of 12%, with interest added (compounded) daily. How much will you have in your account on October 1, or 9 months later? You want to buy a car, and a local bank will lend you $10,000. The loan would be fully amortized over 6 years (72 months), and the nominal interest rate would be 10%, with interest paid monthly. What is the monthly loan payment? While Mary Corens was a student at the University of Tennessee, she borrowed $20,000 in student loans at an annual interest rate of 5%. If Mary repays $200…If you borrow $7,500 at $550 interest for one year, what is your effective interest rate for the following payment plans? (Input your answers as a percent rounded to 2 decimal places.) a. Annual payment b. Semiannual payments c. Quarterly payments d. Monthly payments Effective Rate of Interest % % %
- A loan company advertises that $100 borrowed for one year may be repaid by 12 monthly installments of $9.46. Assuming the difference between the amount repaid and the amount borrowed is interest only, what is the effective annual interest rate being charged?If you borrow $7,300 at $800 interest for one year, what is your effective interest rate for the following payment plans? Note: Input your answers as a percent rounded to 2 decimal places. a. Annual payment b. Semiannual payments c. Quarterly payments d. Monthly payments Effective Rate of Interest % % % %Your firm is offered credit terms of 1/10, net 35. What is the effective annual interest rate on this arrangement? Assume 365 days in each year.
- If you borrow $5,300 at $900 interest for one year, what is your annual interest cost for the following payment plan? (Round the final answers to 2 decimal places.) Effective rate a. Annual payment % b. Semiannual payments % c. Quarterly payments % d. Monthly payments %Consider the following loan. Complete parts (a)-(c) below. An individual borrowed $87,000 at an APR of 6%, which will be paid off with monthly payments of $594 for 22 years. a. Identify the amount borrowed, the annual interest rate, the number of payments per year, the loan term, and the payment amount. the annual interest rate is %, the number of payments per year is The amount borrowed is $ payment amount is $ b. How many total payments does the loan require? What is the total amount paid over the full term of the loan? payments toward the loan and the total amount paid is $ c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest? The percentage paid toward the principal is% and the percentage paid for interest is (Round to the nearest tenth as needed.) There are %. the loan term is years, and theIf $6,840.00 is loaned for 4 months at an annual simple interest rate of 3.5%, how much interest is earned?
- Consider the following loan. Complete parts (a)-(c) below. An individual borrowed $73,000 at an APR of 3%, which will be paid off with monthly payments of $356 for 24 years. a. Identify the amount borrowed, the annual interest rate, the number of payments per year, the loan term, and the payment amount. The amount borrowed is $ the annual interest rate is %, the number of payments per year is, the loan term is years, and the payment amount is $. b. How many total payments does the loan require? What is the total amount paid over the full term of the loan? There are payments toward the loan and the total amount paid is $. c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest? The percentage paid toward the principal is % and the percentage paid for interest is % (Round to the nearest tenth as needed.)Consider the following loan. Complete parts (a)-(c) below. An individual borrowed $87,000 at an APR of 5%, which will be paid off with monthly payments of $592 for 19 years. ... a. Identify the amount borrowed, the annual interest rate, the number of payments per year, the loan term, and the payment amount. The amount borrowed is $ the annual interest rate is%, the number of payments per year is the loan term is the payment amount is $ There are 1 b. How many total payments does the loan require? What is the total amount paid over the full term of the loan? payments toward the loan and the total amount paid is $. c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest? The percentage paid toward the principal is% and the percentage paid for interest is%. (Round to the nearest tenth as needed.) years, andWhat is the effective annual interest rate for 10.5% compounded (a) Semiannually ? (b) quarterly ? (c) monthly ? (d) weekly ? (e) daily ? (f) Hourly ? (g) every minute ? (h) continuously ?
