Homework Answers
| Effective Interest Rate | |
| Annual Payments | 7.16% |
| Semiannual Payments | 7.03% |
| Quarterly Payments | 6.88% |
| Monthly Payments | 6.95% |
The following is calculated through Goal Seek Formula of Excel.
Where desired result was arriving at PV of 0.933202 (10180 / 9500 )
10180 is the future value of Principal + Interest.
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If you borrow $9,500 at $680 interest for one year, what is your effective interest rate...
If you borrow $7,500 at $400 interest for one year, what is your effective interest rate...
If you borrow $7,500 at $400 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.) Effective Rate of Interest a. Annual payment b. Semiannual payments c. Quarterly payments d. |Monthly payments
Problem 8-18 Effective rate under different terms [LO8-2] If you borrow $6,100 at $510 interest for...
Problem 8-18 Effective rate under different terms [LO8-2] If you borrow $6,100 at $510 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.) Effective Rate of Interest Annual payment b. Semiannual payments c. Quarterly payments d. Monthly payments
1. 2. Wisconsin Snowmobile Corp. is considering a switch to level production. Cost efficiencies would occur...
1.
2.
Wisconsin Snowmobile Corp. is considering a switch to level production. Cost efficiencies would occur under level production, and aftertax costs would decline by $28,000, but inventory would increase by $280,000. Wisconsin Snowmobile would have to finance the extra inventory at a cost of 11.5 percent a-1. Determine the extra cost or savings of switching over to level production Loss of. Loss of Profit of a-2. Should the company go ahead and switch to level production? Yes No b....
Your company plans to borrow $14 million for 12 months, and your banker gives you a...
Your company plans to borrow $14 million for 12 months, and your banker gives you a stated rate of 20 percent interest. Calculate the effective rate of interest for the following types of loans. a. Simple 20 percent interest with a compensating balance of 8 percent. (Use a 360-day year. Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest 21.74:% b. Discounted interest (with no compensating balance). (Input your answer as percent rounded to...
Your company plans to borrow $13 million for 12 months, and your banker gives you a...
Your company plans to borrow $13 million for 12 months, and your banker gives you a stated rate of 24 percent interest Calculate the effective rate of interest for the following types of loans a. Simple 24 percent interest with a compensating balance of 10 percent. (Use a 360-day year. Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest b. Discounted interest (with no compensating balance). (Input your answer as a percent rounded to...
Your company plans to borrow $5 million for 12 months, and your banker gives you a...
Your company plans to borrow $5 million for 12 months, and your banker gives you a stated rate of 17 percent interest Calculate the effective rate of interest for the following types of loans. a. Simple 17 percent interest with a compensating balance of 8 percent (Use a 360-day year. Input your answer as a percent rounde Effective rate of interest 18.48% b. Discounted interest (with no compensating balance). (Input your answer as percent rounded to 2 decimal places) Effective...
Wogharts Corp. is planning to borrow $12,000 for one year. a. What is the effective rate...
Wogharts Corp. is planning to borrow $12,000 for one year. a. What is the effective rate of interest if they borrow from a bank that offers an 11.75 percent discount interest loan? b. What is the effective rate of interest if they borrow from a bank that offers a 10.50 percent add-on, one-year installment loan, payable in 4 equal quarterly payments?
Zerox Copying Company plans to borrow $202,000. New Jersey National Bank will lend the money at...
Zerox Copying Company plans to borrow $202,000. New Jersey National Bank will lend the money at one-half percentage point over the prime rate at the time of 10.50 percent (11 percent total) and requires a compensating balance of 29 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...
Problem 6-30 Calculating EAR (L04] You are looking at an investment that has an effective annual...
Problem 6-30 Calculating EAR (L04] You are looking at an investment that has an effective annual rate of 146 percent. a. What is the effective semiannual return? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.) b. What is the effective quarterly return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e... 32.16.) c. What is the effective monthly return? (Do...
Periodic interest rates. In the following table, , fill in the periodic rates and the effective...
Periodic interest rates. In the following table, , fill in the periodic rates and the effective annual rates. First, fill in the periodic rates in the following table. (Round to two decimal places.) Compounding per Year Effective APR Period Periodic Rate Annual Rate Semiannual 7% 2 Data Table (Click on the following icon 9 in order to copy its contents into a spreadsheet.) Compounding per Year Effective Period APR Periodic Rate Annual Rate Semiannual 7% 2 Quarterly Monthly Daily 8%...
If you borrow $7,500 at $400 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.) Effective Rate of Interest a. Annual payment b. Semiannual payments c. Quarterly payments d. |Monthly payments
Problem 8-18 Effective rate under different terms [LO8-2] If you borrow $6,100 at $510 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.) Effective Rate of Interest Annual payment b. Semiannual payments c. Quarterly payments d. Monthly payments
1.
2.
Wisconsin Snowmobile Corp. is considering a switch to level production. Cost efficiencies would occur under level production, and aftertax costs would decline by $28,000, but inventory would increase by $280,000. Wisconsin Snowmobile would have to finance the extra inventory at a cost of 11.5 percent a-1. Determine the extra cost or savings of switching over to level production Loss of. Loss of Profit of a-2. Should the company go ahead and switch to level production? Yes No b....
Your company plans to borrow $14 million for 12 months, and your banker gives you a stated rate of 20 percent interest. Calculate the effective rate of interest for the following types of loans. a. Simple 20 percent interest with a compensating balance of 8 percent. (Use a 360-day year. Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest 21.74:% b. Discounted interest (with no compensating balance). (Input your answer as percent rounded to...
Your company plans to borrow $13 million for 12 months, and your banker gives you a stated rate of 24 percent interest Calculate the effective rate of interest for the following types of loans a. Simple 24 percent interest with a compensating balance of 10 percent. (Use a 360-day year. Input your answer as a percent rounded to 2 decimal places.) Effective rate of interest b. Discounted interest (with no compensating balance). (Input your answer as a percent rounded to...
Your company plans to borrow $5 million for 12 months, and your banker gives you a stated rate of 17 percent interest Calculate the effective rate of interest for the following types of loans. a. Simple 17 percent interest with a compensating balance of 8 percent (Use a 360-day year. Input your answer as a percent rounde Effective rate of interest 18.48% b. Discounted interest (with no compensating balance). (Input your answer as percent rounded to 2 decimal places) Effective...
Problem 6-30 Calculating EAR (L04] You are looking at an investment that has an effective annual rate of 146 percent. a. What is the effective semiannual return? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.) b. What is the effective quarterly return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e... 32.16.) c. What is the effective monthly return? (Do...
Periodic interest rates. In the following table, , fill in the periodic rates and the effective annual rates. First, fill in the periodic rates in the following table. (Round to two decimal places.) Compounding per Year Effective APR Period Periodic Rate Annual Rate Semiannual 7% 2 Data Table (Click on the following icon 9 in order to copy its contents into a spreadsheet.) Compounding per Year Effective Period APR Periodic Rate Annual Rate Semiannual 7% 2 Quarterly Monthly Daily 8%...
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