A loan officer at a bank has 92,000 to lend and is required to obtain an...
A loan officer at a bank has 92,000 to lend and is required to obtain an average return of 16% per year. If he can lend at the rate of 17% or the rate of 12%, how much can he lend at the rate of 12% rate and still meet his required return?
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A loan officer at a bank has 92,000 to lend and is required to
obtain an...
How much can Chase bank lend to a developer, who will repay the loan by selling...
How much can Chase bank lend to a developer, who will repay the loan by selling four custom lots at $250,000.00 each, four years from now. Assume bank will lend at a nominal 12% per year, compounded quarterly? a) $635,500.00 b) $623,200.00 c) $523,600.00 d) $888,487.00
Problem 3 (7 points): Bank wants to lend to business on floating interest rates. The bank...
Problem 3 (7 points): Bank wants to lend to business on floating interest rates. The bank is pretty sure that the client does not default, so the bank excludes credit risk. The bank wants to maintain the ratio between equity and risk weighted assets at 12% and wants to keep return on equity at 20%. All Tier1 is share equity. Assume that the bank is only lending to unrated corporate customers. The bank can take loan on Libor flat interest...
Tucson Bank offers to lend you $50,000 at a nominal rate of 12%, compounded monthly. The loan (principal plus interest)...
Tucson Bank offers to lend you $50,000 at a nominal rate of 12%, compounded monthly. The loan (principal plus interest) must be repaid at the end of the year. Phoenix Bank also offers to lend you the $50,000, but it will charge an annual rate of 10.8%, with no interest due until the end of the year. How much higher or lower is the effective annual rate charged by Tucson versus the rate charged by Phoenix? Solve without Excel. Show...
You want to buy a car, and a local bank will lend you $25,000. The loan...
You want to buy a car, and a local bank will lend you $25,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 4% with interest paid monthly a. What will be the monthly loan payment? Round your answer to the nearest cent. b. What will be the loan's EAR? Round your answer to two decimal places. Finding the required interest rate Your parents will retire in 23 years. They currently...
You want to buy a car, and a local bank will lend you $20,000. The loan...
You want to buy a car, and a local bank will lend you $20,000. The loan would be fully amortized over 6 years (72 months), and the nominal interest rate would be 6%, with interest paid monthly. What is the monthly loan payment? Do not round intermediate calculations. Round your answer to the nearest cent. What is the loan's EFF%? Do not round intermediate calculations. Round your answer to two decimal places. Present Value of an Annuity Find the present...
George is a loan officer at a small bank, and he must make 25 loans per...
George is a loan officer at a small bank, and he must make 25 loans per month. As a loan officer, George must choose capital (K) and labor (L) to minimize his costs while achieving his loan target. Loans (Q) are made using capital and labor via the relationship Q(K,L)=K*L. Labor and capital are paid w wages and r in rent, respectively. a) What is George’s objective function b) What is George’s constraint? c) Which variables are endogenous, and which...
East Commercial Bank offers to lend you $40,000 at a nominal rate of 7.5%, compounded monthly....
East Commercial Bank offers to lend you $40,000 at a nominal rate of 7.5%, compounded monthly. The loan (principal plus interest) must be repaid at the end of the year. West Commercial Bank also offers to lend you the $40,000, but it will charge an annual rate of 8.0%, with no interest due until the end of the year. How much higher or lower is the effective annual rate charged by West Commercial Bank versus the rate charged by East...
Riverside Bank offers to lend you $50,000 at a nominal rate of 6.5%, compounded m...continues
Riverside Bank offers to lend you $50,000 at a nominal rate of 6.5%, compounded monthly. The loan (principal plus interest) must be repaid at the end of the year.Midwest Bank also offers to lend you the $50,000, but it will charge an annual rate of 7.0%, with no interest due until the end of the year. How much higher or loweris the effective annual rate charged by Midwest versus the rate charged by Riverside?
Southwestern Bank offers to lend you $50,000 at a nominal rate of 7.2%, compounded monthly. The...
Southwestern Bank offers to lend you $50,000 at a nominal rate of 7.2%, compounded monthly. The loan (principal plus interest) must be repaid at the end of the year. Woodburn Bank also offers to lend you the $50,000, but it will charge an annual rate of 9.5%, with no interest due until the end of the year. How much higher or lower is the effective annual rate charged by Woodburn versus the rate charged by Southwestern? Select the correct answer....
Paul takes a loan of $225,000 from the bank at 7% interest rate per year over...
Paul takes a loan of $225,000 from the bank at 7% interest rate per year over a 10-year period. He plans to pay off the loan in 10 yearly payments of $16,000 each, and with the money that he is going to inherit from his grand parents. How much should he inherit to pay off the entire loan if the grand parents give him the money at the end of the 4th year and he hands over the entire amount...
How much can Chase bank lend to a developer, who will repay the loan by selling four custom lots at $250,000.00 each, four years from now. Assume bank will lend at a nominal 12% per year, compounded quarterly? a) $635,500.00 b) $623,200.00 c) $523,600.00 d) $888,487.00
Problem 3 (7 points): Bank wants to lend to business on floating interest rates. The bank is pretty sure that the client does not default, so the bank excludes credit risk. The bank wants to maintain the ratio between equity and risk weighted assets at 12% and wants to keep return on equity at 20%. All Tier1 is share equity. Assume that the bank is only lending to unrated corporate customers. The bank can take loan on Libor flat interest...
You want to buy a car, and a local bank will lend you $25,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 4% with interest paid monthly a. What will be the monthly loan payment? Round your answer to the nearest cent. b. What will be the loan's EAR? Round your answer to two decimal places. Finding the required interest rate Your parents will retire in 23 years. They currently...
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