Zerox Copying Company plans to borrow $174,000. New Jersey National Bank will lend the money at one-half percentage point over the prime rate at the time of 12.50 percent (13 percent total) and requires a compensating balance of 24 percent. The principal in this case will be funds that the firm can effectively use in the business. This loan is for one year.      a. What is the effective rate of interest? (Input your answer as a percent rounded to 2 decimal places. Use a 360-day year.)              b. What would the effective rate be if Zerox were required to make four quarterly payments to retire the loan? (Input your answer as a percent rounded to 2 decimal places.)

Xu Salon has a line of credit of $150,000 with an interest rate of 1.625 percent per quarter. The credit line requires that 2.25 percent of the unused portion of the credit line be deposited in a non-interest-bearing account as a compensating balance. Xu Salon's short-term investments are earning .35 percent per quarter. If the line of credit goes unused all year, what is the effective annual interest rate on this arrangement? Assume any funds borrowed or invested use compound interest. Give typing answer with explanation and conclusion

Which of the following statements is most correct? The first payment under a 3-year, annual payment, amortized loan for $1,000 will include a smaller percentage (or fraction) of interest if the interest rate is 5 percent than if it is 10 percent. If you are lending money, then, based on effective interest rates, you should prefer to lend at a 10 percent nominal, or quoted, rate but with semiannual payments, rather than at a 10.1 percent nominal rate with annual payments. However, as a borrower you should prefer the annual payment loan. The value of a perpetuity (say for $100 per year) will approach infinity as the interest rate used to evaluate the perpetuity approaches zero. Statements a, b, and c are all true. Statements b and c are true.

(Loan Amortization Problem) Your company is planning to borrow $2,500,000.  This will be a six-year, 2 percent per year, annual payment, fully amortized term loan.  The first payment will be made one year from today.  What fraction of the total annual payment made at the end of year three will represent repayment of principal?  [Hint: you need only complete the first three rows of the amortization schedule to answer this question.] Step By Step please, as if writing down the solution on a sheet of paper.

Question 5. Attached is a similar question answered

Red Lizard Construction just borrowed $53,600.00. The terms of the loan require the company to make equal monthly payments forever. The first monthly payment is due in 1 month. If the regular monthly loan payment is $600.00, then what is the EAR of the loan? A rate less than 10.44% or a rate greater than 14.72% A rate equal to or greater than 12.43% but less than 13.86% A rate equal to or greater than 10.44% but less than 11.06% A rate equal to or greater than 11.06% but less than 12.43% A rate equal to or greater than 13.86% but less than 14.72% 100

Suppose your bank manager quoted you a 14% annual percentage interest rate on a loan that you need obtain urgently, he stated further that he would be charging the interest rate on the loan, on a bimonthly (every two) basis, what is the Effective Annual Rate that you would be paying?

Yoo, Incorporated, has arranged a line of credit that allows it to borrow up to $51 million at any time. The interest rate is 627 percent per month. Additionally, the company must deposit 5 percent of the amount borrowed in a noninterest-bearing account. The bank uses compound interest on its line-of-credit loans. If the company needs $27 million for 8 months, how much will it pay in interest? Multiple Choice $1.307,50417 $1,457,29019 $1619,200.22 $1.230.592.16) $1,384,41618

15)

You are looking at a one-year loan of $15,000. The interest rate is quoted as 10 percent plus 3 points. A point on a loan is simply 1 percent (one percentage point) of the loan amount. Quotes similar to this one are common with home mortgages. The interest rate quotation in this example requires the borrower to pay 3 points to the lender up front and repay the loan later with 10 percent interest.    What rate would you actually be paying here? Multiple Choice 6.70% 10.00% 13.40% 12.06% 14.74%