The rate quoted by Big Bank on a car loan is 8 percent. The annual rate of inflation is currently 1.5 percent. What is the approximate real interest rate paid by the consumer on this loan?

Q: You took out a loan to buy a new car. The monthly interest rate on the loan is 0.6%. You have to pay…

A: Future value refers to the compounding the future cash flows with the interest rate compounding for…

Q: The effective annual profit rate on a mortgage with monthly payments is 9.38%. What is the monthly…

A: Given the effective annual profit rate of 9.38%, we can calculate the monthly profit rate using the…

Q: A person pays interest on a loan daily at a nominal annual interest rate of 16%. What is most nearly…

A: Effective annual interest rate (EAR) formula: EAR=1+RMM-1 where, R= nominal interest rate m =…

Q: You loan from a loan firm an amount of $100,000 with a simple interest rate of 20% but the interest…

A: When the borrower borrows a loan from the lender, he has to pay a rate of interest on the borrowed…

Q: What was the interest rate on a 3.5-year loan, $1000 loan if the simple interest paid was $297.50?

A: Interest rate = (Total interest / amount) * (1/time)

Q: You are considering a car loan with a stated APR of 6.78% based on monthly compounding. What is the…

A: Effective annual rate is the rate of interest that actually paid or earned. It can be calculated by…

Q: If you take out a 4 year loan for $16,500 at your bank and pay the quarterly payments for the 4…

A: Total interest is = total payments - loan

Q: You borrow $625 for 60 days at a simple interest rate of 2.9%. What is the interest on the loan? Be…

A: The Bankers’ rule is a measure of calculating simple interest where the exact number of days of the…

Q: what is the interest rate

A: Interest rate is the rate at which the bank or any other lenders charges from the borrowers for…

Q: If $500 is borrowed and the interest after 18 months is $45, what is the annual interest rate for a…

A: Given:

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

A: The nominal rate of the loan is stated in annualized terms without considering the effect of…

Q: Explain why many commercial loans require interest to compound more frequently than once a year,…

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

Q: last year, i took out a loan with an interest rate of 4.24% when inflation was only 1.9%. now…

A: The real interest rate is the inflation adjusted interest rate which is reflecting the increase in…

Q: Suppose a man can afford monthly car payments of $380 per month, and his bank is offering a…

A: We need to use loan amortization  formula to calculate amount of loan that can be afford Loan…

Q: Find the interest paid on a loan of $2,700 for one year at a simple interest rate of 11% per year.…

A: Simple interest = Principle × rate × time

Q: If a lender makes a simple loan of $600 for 3 years and charges 5%, then the amount that the lender…

A: An interest rate is the cost of borrowing money or the return earned on an investment or savings…

Q: The maturity value of a 4-month loan of $4,250 is $4,367.50. What is the annual simple interest rate…

A: The maturity value is $4367.50. The principal amount is . The time is  months. The objective is to…

Q: 1. If you deposit money today in an account that pays 6.5% annual interest, how long will it take to…

A: Future value is the value of cash in future at a particular date.Let us assume if person X has…

Q: You have just signed up for a very strange loan - one that is amortized on a WEEKLY basis (i.e. yc…

A: The payment amount is the amount paid periodically during the period. It is decided as per the terms…

Q: What is the simple interest rate on a loan of 2,000.00 that was paid 2,600.00 after 2 years and 6…

A: Interest = Amount - Principal Interest = 2,600 - 2,000 Interest = 600 Time = 2 years 6 months = 2.5…

Q: for borrowing 15000 for 3 years and 3months, a lender charges a borrower 750, what is the simple…

A: A simple rate of interest is one of the simple methods of calculating the interest on borrowings.…

Q: A borrower gets a $75,000, 25 year, 13% loan with 4 points.  What is the true interest rate?

A: Given Information: Loan amount is $75,000 Number of years is 25 Interest rate is 13% 4 points on…

Q: What is the maturity value on a 6-year loan for S7, 585 if the annual simple interest rate is 6.1%?…

A: Principal = $7,585Interest rate = 6.1%Time= 6 yearsMaturity value=?

Q: The bank officer is convincing a customer who is looking for a car loan. Compute the price the bank…

A: Ordinary annuity are the payments which are made at the end of a period.

Q: A payday loan company charges a $25 fee for a $550 payday loan that will be repaid in 14 days using…

A: Interest Amount = Principal * Rate * Time

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

A: The equivalent nominal rate of interest is calculated as quarterly rate multiplied by compounding…

Q: he going rate on student loans is quoted as 8% APR. The terms of the loans call for monthly…

A: Effective annual interest rate  = (1 + (nominal rate / number of compounding periods)) ^ (number of…

Q: The annual income of a borrower is $74,000.00. What is the maximum dollar amount he can borrow to…

A: Maximum amount to borrow = Remaining balance for monthly payments/ current mortgage rate

Q: You have a bank deposit now worth $5000. How long will it take for your deposit to be worth more…

A: Interest is an additional amount which is earned on deposited amount for the period. It increases…

Q: lortgage with Points. Home loans sometimes involve "points," which are es charged by the lender.…

A: Loan amount=$100000Two points are charged.Interest rate=1% per monthPeriod=360 months.

Q: Suppose a borrower and a lender enter into an agreement for a car loan, which lasts for one year.…

A: The rate at which prices rise over time, resulting in a decrease in money's purchasing power is…

Q: If $900 is borrowed and the interest after 6 months is $63, what is the annual interest rate for a…

A: The term simple interest refers to the borrowing arrangement in which the interest is only charged…

Q: f a savings bank pays 5.5% interest every 3 months, what are the annual nominal and effective…

A: Nominal interest rate is the interest rate without considering impact of compounding and flat…

Q: Suppose that you want to take out a loan and that your local bank wants to charge you an annual real…

A: Compute the nominal interest rate: Nominal interest rate is calculated by using following formula:

Q: You are looking at a one-year loan of $20,000. The interest rate is quoted as 10 percent plus two…

A: Loans refer to contracts between two parties where one borrows a sum from the other on the promise…