A loan has a stated interest rate of 3.5% every quarter. What is the EAR for...
A loan has a stated interest rate of 3.5% every quarter. What is the EAR for this loan? Be careful with the wording in the problem. It is intentional.
The correct answer is 14.7523, but using the formula EAR=( 1+r/n)^n-1 I get 3.55.
Homework Answers
Add Answer to:
A loan has a stated interest rate of 3.5% every quarter. What is
the EAR for...
1. A loan has a stated interest rate of 0.82% every month. What is the EAR...
1. A loan has a stated interest rate of 0.82% every month. What is the EAR for this loan? Be careful with this wording. It is intentional. 2. A loan has a stated interest rate of 6.3% compounded quarterly. What is the EAR for this loan? 2. A loan has a stated interest rate of 6.3% compounded quarterly. What is the EAR for this loan?
What is the EAR (effective annual rate) of a credit card that has a stated rate...
What is the EAR (effective annual rate) of a credit card that has a stated rate of 14.9%? The credit card compounds interest monthly. Record your answer as a decimal, so if the answer is 16.32% record the answer as 0.1632.
3. Actuarial Interest Rate (a) What is your understanding of"actuarial interest rate"? (b) For a loan...
3. Actuarial Interest Rate (a) What is your understanding of"actuarial interest rate"? (b) For a loan with a single payment of principal and interest due at the end of N periods, the actuarial interest rate ray be calculated as follows: 0V-PKI+i) Using the above formula, find the actuarial interest rate of a loan of $30.000 to be repaid in equal annual installments of $6,68747 each over a 6-year period.
Problem 2: The quarterly payment on a 15‐year construction loan is $1867.50. The loan’s interest rate...
Problem 2: The quarterly payment on a 15‐year construction loan is $1867.50. The loan’s interest rate is a 6.40% annual percentage rate (APR) and payments are end‐of‐quarter. (a) What is the builder’s loan amount? (b) What is the loan’s effective annual rate (EAR)? (c) What will the loan balance be immediately after the 39th payment is made?
Last Bank of Podunk is lending a business S150,000. The loan has a 6% stated interest...
Last Bank of Podunk is lending a business S150,000. The loan has a 6% stated interest rate and matures in 1-year. In each case below tell 1) how much you borrow and 2) compute the actual interest rate on the loan (show answer in percent with two decimal places). a) The loan requires a 25% compensating balance. b) The loan is a discount loan where the interest is taken from the proceeds at the beginning of the loan. c) The...
A loan that compounds interest monthly has an APR of 22 percent. What is the EAR?...
A loan that compounds interest monthly has an APR of 22 percent. What is the EAR? a)24.36 percent b) 23.89 percent c) 22.00 percent d) 23.12 percent
A credit card issued through Frost Bank has a nominal interest rate of 3.5% per quarter,...
A credit card issued through Frost Bank has a nominal interest rate of 3.5% per quarter, and the compounding period is quarterly. Calculate the effective interest rate on a (a) semiannual basis, and (b) annual basis
You plan to apply for a loan from Bank of America. The nominal annual interest rate for this loan is 15.31 percent, comp...
You plan to apply for a loan from Bank of America. The nominal annual interest rate for this loan is 15.31 percent, compounded daily (with a 365-day year). What is the effective annual rate, or EAR (annual percentage yield), of this loan? Please show work. I don't under how to use the ^ in the formula/equation.
Loan 2 Beginning-of-month repayment 3 Interest Rate, i 4 Months, n 5 Amount of Loan 24...
Loan 2 Beginning-of-month repayment 3 Interest Rate, i 4 Months, n 5 Amount of Loan 24 $1,500 Recreate the above in excel. You seek to borrow $1,500 from a friend to cover your gym fees. You promise to repay the loan in 24 monthly repayments commencing today. If the effective annual interest (EAR) rate is 24.3% what is the amount of the monthly repayment? (answer do not include $ sign; show cents eg 100.00)
1. A bank pays a quoted annual (simple) interest rate of 8 percent. However, it pays...
1. A bank pays a quoted annual (simple) interest rate of 8 percent. However, it pays interest (compounds) on a daily basis using a 365-day year. What is the effective annual rate of return? Show details of the EAR formula. 2. You have just taken out a 30-year mortgage on your new home for $120,000. This mortgage is to be repaid in 360 equal monthly installments. If the stated (simple) annual interest rate is 14.75 percent, what is the amount...
3. Actuarial Interest Rate (a) What is your understanding of"actuarial interest rate"? (b) For a loan with a single payment of principal and interest due at the end of N periods, the actuarial interest rate ray be calculated as follows: 0V-PKI+i) Using the above formula, find the actuarial interest rate of a loan of $30.000 to be repaid in equal annual installments of $6,68747 each over a 6-year period.
Last Bank of Podunk is lending a business S150,000. The loan has a 6% stated interest rate and matures in 1-year. In each case below tell 1) how much you borrow and 2) compute the actual interest rate on the loan (show answer in percent with two decimal places). a) The loan requires a 25% compensating balance. b) The loan is a discount loan where the interest is taken from the proceeds at the beginning of the loan. c) The...
Loan 2 Beginning-of-month repayment 3 Interest Rate, i 4 Months, n 5 Amount of Loan 24 $1,500 Recreate the above in excel. You seek to borrow $1,500 from a friend to cover your gym fees. You promise to repay the loan in 24 monthly repayments commencing today. If the effective annual interest (EAR) rate is 24.3% what is the amount of the monthly repayment? (answer do not include $ sign; show cents eg 100.00)
Most questions answered within 3 hours.
-
Suppose that XX is a random variable with mean 16 and standard
deviation 5 . Also...
asked 6 minutes ago -
Calculate the number density of argon gas at a temperature of
24C and a pressure of...
asked 3 hours ago -
Alternative
Classification
How to Estimate
Probabilities from Data? ( For continuous Attributes)
And How to generate...
asked 3 hours ago -
An explosion breaks a 20.0-kg object into three parts. The
object is initially moving at a...
asked 4 hours ago -
Calculate the approximate number of residues of Rubisco, which
is involved in carbon fixation in plants,...
asked 5 hours ago -
Other decisions about scientific claims can have a much broader
impact.ENERGYarrow-10x10.png, environment, health, security - all...
asked 6 hours ago -
I need to write a research paper and work cited about this
topic: The United States...
asked 6 hours ago -
Hello! I was wondering if I could have some help?
If the vapor pressure of carvone...
asked 6 hours ago -
An economist wants to estimate the mean per capita income (in
thousands of dollars) for a...
asked 7 hours ago -
What would be the input/output characteristic of a circuit
obtained by putting two of your 2's-complementers...
asked 7 hours ago -
In Drosophila, the transition from the syncytial blastoderm
stage to the cellular blastoderm stage is a...
asked 7 hours ago -
Project management question:
Name 3 different types of resources (hint: humans are one
type)
asked 7 hours ago