What discount rate should a lender charge to earn an interest of 2 1/4 % on a 90-day loan? Hint: An interest rate r and discount rate d are said to be equivalent if these two simple rates give the same present value for an amount due in the future. Thus, r = d/(1 - dt) and d = r/(1 + rt)

Q: You are loaned $300 at the end of years 1 and 2, and loaned X at the end of year 3. You pay this…

A: We will use the concept of time value of money. Here each payment is made in a different time period…

Q: 4. Use MV = P(1 + RT) to find the maturity value (in $) of the loan. Principal Rate (%) Time…

A: The maturity value is calculated as sum of principal and interest earned

Q: Using the pro-forma table below, what is your levered IRR? Purchase Price Loan Proceeds Loan Fees…

A: In a real estate, purchase sale transaction, the equity IRR or the levered IRR is to be found. All…

Q: Find the amount (in $) of interest and the maturity value of the loans. Use the formula  MV = P + I…

A: Interest expense is a rate at which interest is calculated on the notes payable (amount borrowed).…

Q: loan

A: The real interest rate is the rate which shows the preference of the borrower to get the loan at the…

Q: Solve the following problems involving real rates of return and interest. a) Find it with 5.5%…

A: Here, To Find: Part A. Real rate of interest =? Part B. Nominal rate of interest =? Part C. Average…

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: What’s the equivalent interest rate to the terms 3/20, n/60? In other words, what is the effective…

A: Time Value of Money:  The term 3/20 means if the customer makes payment within 20 days he will enjoy…

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: T/F and why?

A: Real interest rate is the rate of interest that received by the investor after adjusting the…

Q: A company has a loan of 80,000 to be paid in 20 level annual payments. The interest and the…

A: Loans are paid by annual payments that carry the interest and loan amount but annual payments are…

Q: If there is a deflation rate of 2% and your account is earning a nominal interest rate of 1.75%,…

A: Deflation rate (d) = 2% Nominal interest rate (r) = 1.75%

Q: A lending institution charges interest at the rate of 3.5% per quarter, a. What is the nominal…

A: Interest rate per quarter = 3.5%   a. What is the nominal interest rate?       Nominal interest rate…

Q: Quantitative Problem: Bank 1 lends funds at a nominal rate of 9% with payments to be made…

A: Information Provided: Bank 1 Rate = 9% compounded semi-annually Bank 2 Rate Compounding = Quarterly…

Q: What should be the simple discount rate if a loan amount of P500,000 with a loan term of 3 years…

A: Loan amount (P) = P500,000 Loan proceeds (C) = P480,000 Loan term (t) = 3 Years Simple discount rate…

Q: 2. If you receive $249 each quarter for 4 quarters and the discount rate is 0.08, what is the…

A: In this Question we require to calculate the Present Value of Cash flows received every quarter for…

Q: thanks

A: Formula for compound interest is: A = P(1+r/n)^nt Where A is the future amount, P is the principal,…

Q: ic formula for present value, along with the given discount rate, r, and the number of periods, n,…

A: Present value = Future value * (1 + discount rate)-No. of periods

Q: The nominal interest rate on a loan is 12.5% and inflation is 3%. What is the real interest rate?

A: Information Provided: Nominal Rate = 12.5% Inflation = 3%

Q: Use the formula A=P(1+rt) to calculate the maturity value of the simple interest loan when…

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

Q: What interest rate would make it worthwhile to incur a compensating balance of $15,000 in order to…

A: A compensating balance is a specific amount of money a borrower must maintain in an account with a…

Q: You are taking out a single-payment loan that uses the simple interest method to compute the finance…

A: Amount of Loan = $10,000Interest Rate (annual) = 6% = 0.06 (as a decimal)Term of Loan = 2 yearsThe…

Q: What do we know about a loan, which is said to have annuity payments? a. This loan has annual…

A: The loan can be referred to as the debt amount that the borrower takes till certain maturity period…

Q: You are planning on taking out a mortgage and would ake to determine the cash value for a given down…

A: Solution:- When a loan is taken, it can either be repaid as lump sum payment or in instalments.

Q: Consider two loans with one-year maturities and id and a(n) 8.4% loan with a 4.5% (no-interest) comp…

A: Effective annual rate refers to the interest rate that is being charged by the lender to the…

Q: b) An APR of 5.875 produces an effective annual interest rate of 6.04% what is the compounding…

A: The effective annual rate is the actual return that the company owes to its investors.

Q: How did it become 0.04768?

A: Here, To Find: Future value of loan =? Equal amount paid after every six months =?

Q: If the effective interest rate is 15%, what nominal rate of interest is charged for a c compounded…

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

Q: Which of the following statements regarding the interest rates is correct? I As a result of…

A: The correct option is c) I and II only.

Q: As a loan is paid off, the   monthly payment increases debt and interest portions do not change each…

A: Interest expenses on loan is calculated on the closing balance of the loan  account on a particular…

Q: Which of the following is false? I. A lower interest rate would increase the present value of an…

A: Solution: Present value means the value of cash flows in today’s terms.

Q: 3.16 Suppose v(t) = Assuming that future payments earn the forward 20+t° rates of interest,…

A: FV is the future worth of cash flows that have occurred in the past or present.

Q: Suppose that the interest rate is 4%. What is the value of the discount factor, v? υ Enter a value…

A: An interest rate is given. We have to find the value of the discount factor and the discount rate.…

Q: True or False: PMI is usually charged at 0.5% to 1% of loan value. False True

A: Private mortgage insurance also called PMI

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: For each of the following cases, indicate (a) what interest rate columns and (b) what number of…

A: The phrase "annual rate" means the interest rate or percentage that is applied to a loan, borrowing…

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…

Q: What is the yield to maturity (YTM) on a simple loan for $1,000 that requires a repayment of $3,000…

A: yield to maturity (YTM)The yield to maturity is a financial metric used to measure the annual rate…

Q: If the proceeds of a loan of P12,450 will be paid with P12,840 at the end of 1 year and 9 months.…

A: Loan amount = P 12450 Par value = P 12840 Discount amount = Par value-Loan amount…

Q: Given this is the situation, how should I be calculating the APR for each form of debt? It is…

A: Debt is something that one party borrows from another, usually money. Debt is used to make large…