the intereswt rate a company pays on 1 - year, 5-year loan depends on?

Q: A Forward Rate Agreement contains an agreed interest rate of 5.75% on a 6-month loan. If settled at…

A: Forward rate agreements are used by entities to hedge against the interest rate risk. It is an…

Q: Which of the following is the cheapest for a borrower? 6.7% annual money market basis 6.7%…

A: Interest rate are compounded than effective interest rate is more and effective interest rate is…

Q: how are the origination fees borne by the borrower accounted for in relation to the initial…

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Q: The approximate effective cost (EC) of financing the discount price of trade credit under terms…

A: Discount (d) = 2% for 10 days and then net on last day, which is day 30. Total days (T) = 30…

Q: What is the difference between computing interest at a nominal annual rate of interest and computing…

A: The interest rate which is taken into account before considering inflation is called the nominal…

Q: Which of the following is the cheapest for a borrower? 7% annual money market basis 7% semi-annual…

A: Generally, the annual basis is cheaper as compared to the semiannual basis, because on an annual…

Q: Compare the annual payments calculated and potential risks or benefits involved for a foreign…

A: Data given : Interest rate at 5%, 12% and 15%. Assumption : Exchange rate remains unchanged during…

Q: If a trade payable has a credit term of 2/10, what day is the best day to settle it?

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Q: He then asks you to describe the advantages and disadvantages of a 15-year loan versus a 30-year…

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Q: (a) What is the rebate fraction of a 36 month loan paid off after the 12th payment? (b) What is the…

A: Rebate: It is the amount of money that is returned or credited to the customer in regard to a…

Q: What are the nominal and effective costs of trade credit under the credit terms of 2/20, net 35?…

A: Credit terms specify the rate of discount a business can obtain when full payment is made within the…

Q: What is the amount of compensating balance would be required for a nominal interest rate of 12% to…

A: Nominal interest rate (r) = 12% Effective interest rate (i) = 14.40% Let the compensating balance as…

Q: The lender charges the borrower 1.8% per quarter. Find the equivalent nominal rate of interest.…

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A: Commercial loans require interest rates to compound more frequently once e year because it issues…

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A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

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A: The maturity date is the date on which the final payment of the loan is due. At the time of…

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A: formula: A=P(1+rt) where, p=principal r=rate  t=time in years

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A: The effective annual rate refers to the rate of return provided by the investment over a year…

Q: What is Debt Service?

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A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

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A: Compounding continuously is imaginary situation which actually does not exist in real life…

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A: Reserve requirement refers to an amount that is kept aside by the bank for the purpose of meeting…

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A: Prime rate is the rate of interest which is charged by the commercial banks from most trusted…

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A: We take loans to buy things that we cannot afford on our own.  The loan is then repaid through fixed…

Q: What is the total amount you will pay if you do not pay the loan within the term and meet all the…

A: Step 1:Given: Loan amount = $5400Period of loan = 72 monthsFinal loan amount = $6965.35Interest is…

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A: Interest on a Note payable the amount of interest currently owed to lenders.   Interest payable is a…

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Q: annual pay All of them

A: Loan are given to clients to pay the loan back by periodic equal payments.

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A: Maturity value is the sum of principal loan and interest earned during the loan period

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A: Interest rate is the rate or charge of borrowing money.

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A: Simple interest rate is interest on the loan amount and there is no interest on interest amount.

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Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.