Homework Answers
| Part A | |
| Debt | 10000 |
| Period | 48 |
| Monthly payment | 275 |
| Excel formula for rate | Monthly rate |
| =RATE(48,275,-10000,0,0,) | 1.20% |
| APR = 12*1.20% | |
| APR = 14.40% | |
| EAR = ((1+(14.4%/12))^12)-1 | |
| EAR = 15.39% | |
| Part B | |
| Debt | 10000 |
| Period | 4 |
| Annual payment | 3300 |
| Excel formula for rate | Monthly rate |
| =RATE(4,3300,-10000,0,0,) | 12.11% |
| APR = 12.11% | |
| EAR = 12.11% | |
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You need a $10,000 car loan and are talking to two different banks. FIN 3013 Project...
You need a $10,000 car loan and are talking to two different banks. i. Big Bank...
You need a $10,000 car loan and are talking to two different banks. i. Big Bank offers you a $10,000 auto loan requiring 48 monthly payments of $275, paid at the end of each month. What is the APR of the loan? What is the effective annual rate? 11. Little Bank's loan has 4 annual year-end instalments, each equal to 12 times the Big Bank monthly loan payments, e.g. Payment =12*275 = $3300. Should you accept Little Bank's loan? (Ctrl)...
Show all excel formulas used Ex. 3 JIf a dealer offers you a car at $275...
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You need a $10,000 car loan and are talking to two different banks. i. Big Bank offers you a $10,000 auto loan requiring 48 monthly payments of $275, paid at the end of each month. What is the APR of the loan? What is the effective annual rate? 11. Little Bank's loan has 4 annual year-end instalments, each equal to 12 times the Big Bank monthly loan payments, e.g. Payment =12*275 = $3300. Should you accept Little Bank's loan? (Ctrl)...
Show all excel formulas used
Ex. 3 JIf a dealer offers you a car at $275 monthly payment for 5 years plus $5,000 down. If you can get a similar loan from a bank at APR of 12%, what is the price that you're paying? Down payment Monthly payment Loan period months APR No. of compounding times per year Monthly rate Present Value Book formula Excel function Ex. 4 If you take out an $10,000 car loan that call for...
2) You have received a 3-year $10,000 loan from your bank. This is an amortized loan which means you have to make 3 equal annual payments to the bank. The bank is charging you 12% APR (annual percentage rate) for this loan. a. Complete the following amortization schedule. (25 points) Amortization schedule Beginning Balance Annual Payment Interest Balance Reduction year End Balance Expense $10,000 $0.00 How much in total you end up paying back to the bank? (5 points) Assume...
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