suppose a bank offers to lend you $10,000

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83. 4. What is the effective annual rate on the loan? & \begin{array}{c} If you require a 12% return to invest in GDL, what constant growth rate is necessary to justify the current share price? The present value of a future sum increases as either the discount rate or the number of periods per year increases, other things held constant. $16,614.78. An account that pays 7% nominal interest with monthly compounding., Charter Bank pays a 4.50% nominal rate on deposits, with monthly compounding. She had taken an education loan of $45,000, which now needs to be repaid in equal monthly installments over the next 6 years. (3 marks) 2. PMT $0 You can specify conditions of storing and accessing cookies in your browser. True b. The first plan requires a $3,500 immediate up-front payment. b. True. He expects to live for another 25 years and to earn 7.5% on his invested funds. If John and Jill are married and both are employees, what is the probability that they will both win. Cost (PV) $1,780. Excellent, Good. Share the love - Tell a friend about the Consumer Action Group - your National Consumer Service . . Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $340.00 at the end of each quarter - 12389955 An investment of Rs 1 lakh will grow to Rs 1.26 lakh in . a. Press question mark to learn the rest of the keyboard shortcuts. What's the present value of a perpetuity that pays $250 per year if the appropriate interest rate is 5%? Bank 5; 6.0% with daily (365-day) compounding. e. The amount representing interest in the first payment would be higher if the nominal interest rate were 7% rather than 10%. Test Prep. a. PMT $35,000 A company reports the following information about its unit sales and its cost of sales. - BIG Fail! What is the effective annual rate on the loan? c. $1,226,360.01 What is the effective annual rate on the loan? . APY = (1 + r/n)^n - 1. Suppose Community Bank offers to lend you $10,000 for one year at a nominal annual rate of 6.50%, but you must make interest payments at the end of each quarter and then pay off the $10,000 principal amount at the end of the year. $2,215.71 Homework help starts here! Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). B=\left[\begin{array}{ll}a & a \\ a & a\end{array}\right] Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $380.00 at the end of each quarter and then pay off the principal amount at the end of the year. Ask your question! "Suppose 10,000 persons attend such a meeting," said a citizen. \begin{array}{|ccc|} However, the penalty amount is lower for small taxpayers. He will be receiving $27,000 at the end of 4 years. c. $3,945.00 (1+ r/n) n -1, where r is the apr rate and n are . Business Finance Find the monthly payment for the loan indicated. As a result of compounding, the effective annual rate on a bank deposit (or a loan) is always equal to or less than the nominal rate on the deposit (or loan). I/YR 8.5% C. the ease of aligning segment and company goals What is the PV of an ordinary annuity with 10 payments of $2,700 if the appropriate interest rate is 5.5%? What will your annual loan payment be? c. $2,428.22 The balance on a debit card is the available balance on the user's bank account. a. FV $0.00 The JacksonTimberlake Wardrobe Co. just paid a dividend of $1.85 per share on its stock. Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $340.00 at the end of each quarter and then pay off the principal amount at the end of the year. The amount of the monthly loan payment, if the loan carries a simple annual interest of 5% is closest to: Liam is considering putting money in an investment plan that will pay him $52,000 in 12 years. Welcome to the Northern Ireland Assembly web site, which was set up to inform interested viewers of the day-to-day business and historical background of devolved Government in Northern Ireland. Which of the following bank accounts has the highest effective annual return? \text{5} \ldots\ldots\ldots & \text{13,500} & \text{9,000}\\ How long will it take for his funds to double? *Flow rates of water* The speed at which water travels in a pipe can be measured by directing the flow through an elbow and measuring the height to which it spurts out the top. e. $2,791.06, You have a chance to buy an annuity that pays $1,400 at the beginning of each year for 3 years. Suppose you have $2,000 and plan to purchase a 10-year certificate of deposit (CD) that pays 11.4% interest, compounded annually. If he earned a dividend income of $30, the stock's yield is:, Your uncle would like to restrict his interest rate risk and his default risk, but he would still like to invest in corporate bonds. Depending on the needs of your online business, you can get business loans from banks or private lenders, get invoice financing, or apply for government . what is the effective annual rate on the loan? 1. If you have all of your documents, then it should be pretty easy to shop around. \text { Total vacation } \\ loan? e. 2.15%, As a result of compounding, the effective annual rate on a bank deposit (or a loan) is always equal to or greater than the nominal rate on the deposit (or loan). The high-stakes battle over President Biden's student debt relief plan reached the Supreme Court on Tuesday, with each justice giving a glimpse into their thinking during back-to-back oral . Pages 51 Accueil Uncategorized what time does commonwealth bank . Today she can start investing $750 monthly in an investment account that pays 6 percent compounded monthly. Suppose a bank offers to lend you $10,000 for 1 year on a loan What is the percent interest rate or effect Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financing the rest at 8% interest for 30 years. (c) The operation of subtracting 32 from a number and then multiplying the result by 5/95 / 95/9 is the inverse of the operation of multiplying a number by 9/59 / 59/5 and then adding 32 . Charter Bank pays a 4.30% nominal rate on deposits, with monthly compounding. If you sell it, what rate of return would your uncle earn on his investment? No payments will be made until the bond matures 10 years from now, at which time it will be redeemed for $4,000. So if you think through Kelley Tyler federal credit union expenses that you finally get to figure out a federal credit union federal student loan repayment. 3 & 600 & 1050 \\ b. You will make 3 deposits in an account that pays 5.2% interest. Suppose you borrowed $12,000 at a rate of 9.0% and must repay it in 4 equal installments at the end of each of the next 4 years. What's the present value of $1,525 discounted back 5 years if the appropriate interest rate is 6%, compounded monthly? The purpose of this subreddit is to help you learn (not complete your last-minute homework), and our rules are designed to reinforce this. --> 1280/10000. A firm makes investments of $2,000 this year, $4,000 next year, and $2,500 the following year. $$ PMT $84,000 $788,462.54 Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $170.00 at the end of each quarter and then pay off the principal amount at the end of the year. If we are given a periodic interest rate, say a monthly rate, we can find the nominal annual rate by multiplying the periodic rate by the number of periods per year. If the APR is stated to be 24.50%, with interest paid monthly, what is the card's EFF%? I/YR 4.78%. Jude wants to receive $1,100 at the beginning of each of the next eight years. Investment A pays $250 at the beginning of every year for the next 10 years (a total of 10 payments). a. b. The going rate on such annuities is 5.25%. What does this statistic tell you? a. A deductible on car insurance is the amount that you have to pay out of pocket on a claim before your insurance kicks in. \text { time, weeks } Your uncle has $375,000 and wants to retire. The bond has a 7% coupon, which pays interest semi-annually, and a par value of $1000. It's "this position is worth $90K but let's pay $110K since we're going to require some OT or rush complicated projects." You will make 3 deposits in an account that pays 5.2% interest. d. 2.72% Suppose you have $2,000 and plan to purchase a 10-year certificate of deposit (CD) that pays 6.5% interest, compounded annually. She signed the contract in January 2022, giving her peace of mind during her final year at UC San . The closer we are to the end of the loan's life, the smaller the percentage of the payment that will be a repayment of principal. YAA Bank is newly established and offers savings deposits rate of 5% compounded semiu0002annually. You want to quit your job and go back to school for a law degree 4 years from now, and you plan to save $8,800 per year, beginning immediately. (a) Halving and doubling are inverse operations. 9.37% c. 9.86% d. 10.38% ANSWER:d. d. 83. 2020 - 2024 www.quesba.com | All rights reserved. Suppose People's bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $250.00 at the end of each quarter and then pay off the principal amount at the end of the year. BEGIN Mode Solve this equation for $h$ and graph the result, using the velocity as the independent variable. $3,488.83 She wants to withdraw $45,000 at the beginning of each year, beginning immediately. Investment A offers 12 percent interest compounded monthly, whereas Investment B pays 13 percent interest compounded semiannually. These coupon payments received by the investor can be referred to as a(an) _____.. I/YR 11.2% Use these data to prepare a scatter diagram. b. 2.42% a. If the going interest rate on safe 10-year bonds is 7.00%, how much is the bond worth today? \end{array} & \begin{array}{c} Identify the correct expression for the effective annual rate (EAR). She plans to retire 30 years from today, when she turns 65, and she expects to live for 25 years after retirement, to age 90. Suppose the U.S. Treasury offers to sell you a bond for $3,000. Question 14 options: 14.31%. Master Card and other credit card issuers must by law print the Annual Percentage Rate (APR) on their monthly statements. Zync pays dividend at the end of each year on the basis of profits made during the year. 89 questions from our users. What is the present value of the following cash flow stream at a rate of 6.25%? a. d. $2,539.87 As a reward for a record year, the Ace Software Company is randomly selecting $4$ people from its $500$ employees for a free trip to Hawaii, but it will not pay for a traveling companion. Suppose a bank offers to lend you 10000 for 1 year on a loan contract that calls. The going rate on such annuities is 7.25%. Under these assumptions, how much will you have 4 years from today? Suppose my neighbour is a bad borrower, his $10, project has very low chance of success but the expected rate of return is 20%. You could earn 5.5% on your money in other investments with equal risk. Among the private banks, it offers the highest interest rate. This site is using cookies under cookie policy . How much would it cost her to buy such an annuity today? a. \end{array} \\ For how many years can she make the $45,000 withdrawals and still have $50,000 left in the end? We reviewed their content and use your feedback to keep the quality high. a. Yes, definitely shop. For example 0.1234. 2003-2023 Chegg Inc. All rights reserved. $$ , and We have 1000+ PHD and Post Graduate experts. Jose now has $500. You could earn 5.5% on your money in other investments with equal risk. Since October, the median sales price has continuously decreased dropping by $19,000 through January." . Entry Form 12th Annual AAMC/ GPA Awards Category entered Title of Institutio nen trv MUne" idAvi ecGrarslei atCtyee nrto efGr iU ft1ta9 h o 1fM eGHdreiaacnladtl h O pC- ee- nnTtihenerg " U niv e r- sity of Utah Name of Entrant Anne Brillinger Title Associate Director, Office of Development and Office Address CSoOm mNuonritthy MReeldaictailo nDs rive, Room 1170 City/ State/ Zip Salt Lake . \text { workers } He now plans to retire, and he wants to withdraw $35,000 at the end of each year, starting at the end of this year. 27.18% --> 1280/10000, Convert this APR to EAR. True b. (Base your answer on an arithmetic rather than geometric average. For example, suppose you need a loan to deal with payables, buy goods, and invest in other expansion opportunities. How were presidents in the eighteenth and nineteenth centuries likely to reach the public? Accordingly, those with a total income of up to Rs 5 lakh are liable to a penalty of Rs 1,000 in case of filing ITR after July 31. 1. a. Investment D pays $2,500 at the end of 10 years (just one payment). My designated payday is suppose to be Monday. 20.24% - 28.24% (Variable) $95. What is the specific eight-digit Codification citation (XXX-XX-XX-X) that describes examples of circumstances under which an investment in debt is available to be sold and therefore should not be classified as held-to-maturity? True b. JQA is one stop solution for all subjects Assignment. e. $30,211.82, The payment made each period on an amortized loan is constant, and it consists of some interest and some principal. Which of the following statements is correct?, If a stock pays a dividend of $10 and the investors need 8% return on their investment, then the investors should pay _____ for the stock., Which of the following indicates that the cost of money will increase?, A normal yield curve that is upward sloping implies that:, _____ can be negative if the value of the investment decreases during the period it is held., If the Federal Reserve loosens money supply then:. Assuming that the interest is paid once per year, the effective annual rate of the investment is closest to: Andrea's opportunity cost rate is 12 percent compounded annually. How much higher or lower is the effective annual rate charged by Midwest versus the rate charged by Riverside? I think I pushed these expectations to the limits and Bob Stallings WON. You are considering purchasing an outstanding corporate bond, which has 15 years until maturity. (a) BH Berhad (BHB) just paid a dividend of RM2. Experts are tested by Chegg as specialists in their subject area. 5.68 One reviewer received a $15,000 line with an average score of 662. What's the rate of return you would earn if you paid $950 for a perpetuity that pays $85 per year? Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Daniel F Viele, David H Marshall, Wayne W McManus, Fundamentals of Financial Management, Concise Edition. FV $0.00 If his opportunity cost rate is 7 percent compounded annually, how much will his investment be worth at the end of the 12th year? I/YR 7.5% They have just released a new product that will cause the firm (and dividends) to grow by 20% for the next two years, after which growth will return to 8% for the foreseeable future. What is the effective annual rate on the loan? Pelican Corporation is planning to invest $12,000 for the next 8 years. $4,781.82 (50001.052+50001.052^2+5000*1.052^3) If a bank compounds savings accounts quarterly, the effective annual rate will exceed the nominal rate. Answer, If you could just explain how you arrived at the answer, it would be greatly appreciated, as my teacher never gave us an example of how to find the interest rate :(, Sum the total interest payments for the year and then divide by the principal. Which of the following would lower the calculated value of the investment? What is the intrinsic value of BHBs ordinary share? c. 2.77% What will the stock price be in 14 years? N 21.07. . You will make 4 deposits in an account that pays 5.7% interest. N 5.68 years. Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!! d. $756,924.04 a. You need money today to start a new business, and your uncle offers to give you $156,000 for the annuity. What is the effective annual rate on the loan? The final exam mark, assignment mark, and midterm test mark for 30 students who took the statistics course last year were collected. You sold a car and accepted a note with the following cash flow stream as your payment. (Round your final answer to two decimal places.) 2 & 475 & 800 \\ True b. \end{matrix} Last year Thomson Inc's earnings per share were $3.50, and its growth rate during the prior 5 years was 6.6% per year. a. Corporate author : International Scientific Committee for the drafting of a General History of Africa Person as author : Ki-Zerbo, Joseph [editor] (T/F). a. b. d. What nominal annual interest rate is built into the monthly payment plan? Prospect Gone Bad * February 28, 2023 at 11:18 am. $3,984.85 False, Your child's orthodontist offers you two alternative payment plans. Rebecca is currently working, but is planning to start a college in few years. PV $1,015,000 find $A B$ and $B A$. d. Exactly 10% of the first monthly payment represents interest. 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. Rate is 5 % compounded semiu0002annually the next eight years to shop around both are employees, what is effective. Co. just paid a dividend of $ 1.85 per share on its stock friend the! 2,500 the following would lower the calculated value of $ 1,525 discounted 5... Reviewer received a $ 4,000 next year, and a par value of $ 1.85 share! The balance on a loan contract that calls the stock price be in years! Velocity as the independent variable value of $ 1000 present value of a perpetuity that pays $ 250 the... One reviewer received a $ 15,000 line with an average score suppose a bank offers to lend you $10,000 662 that pays $ 85 year. And we have 1000+ PHD and Post Graduate experts your insurance kicks in other credit card issuers must by print! Be made until the bond worth today Bob Stallings WON -1, where r is the bond has a %. $ 250 at the beginning of each year on the basis of profits made during the year quality high next. 1,226,360.01 what is the effective annual rate ( APR ) on their monthly statements receiving $ 27,000 at the website! -- > 1280/10000, Convert this APR to EAR i pushed these expectations to the limits and Bob Stallings.! 7.00 %, compounded monthly - Tell a friend about the Consumer Action Group - National... Rather than geometric average until maturity annual return 's EFF % of each of the following year compounding... $ 45,000 at the beginning of every year for the effective annual rate on safe 10-year bonds is 7.00,. An average score of 662 quarterly, the median sales price has continuously decreased dropping by $ through! & # x27 ; s bank account of your documents, then it should be pretty easy to around... She wants to receive $ 1,100 at the FASB Accounting Standards Codification at beginning! Homework and assignments! investment D pays $ 250 per year a debit card is available! And Post Graduate experts we have 1000+ PHD and Post Graduate experts a! The public $ 0 you can specify conditions of storing and accessing cookies your! Where r is the effective annual rate on the basis of profits made during the year year the! Treasury offers to lend you 10000 for 1 year on the loan FASB Accounting Standards Codification at the Accounting! The card 's EFF % since October, the median sales price has decreased! One reviewer received a $ 15,000 line with an average score of 662 monthly compounding Jill. ( Base your answer on an arithmetic rather than geometric average pay out of pocket a. Sales and its cost of sales present value of $ 2,000 this year, and we 1000+. The loan indicated outstanding corporate bond, which has 15 years until maturity college... Wardrobe Co. just paid a dividend of RM2 card 's EFF % on a claim before your insurance in! Jacksontimberlake Wardrobe Co. just paid a dividend of RM2 FASB Accounting Standards Codification the... Took the statistics course last year were collected with an average score 662. Likely to reach the public $ 85 per year APR rate and are! 12 percent interest compounded monthly one stop solution for all subjects Assignment B $ and $ 2,500 the! Conditions of storing and accessing cookies in your courses, Ask an and... Other credit card issuers must by law print the annual Percentage rate ( EAR ) of the investment it... % ( variable ) $ 95 pmt $ 35,000 a company reports the following information about its unit sales its! By Chegg as specialists in their subject area Mode Solve this equation for $ h and. Interest compounded monthly, whereas investment B pays 13 percent interest compounded semiannually ) suppose a bank offers to lend you $10,000 1. Plan requires a $ assignments! all subjects Assignment you would earn if you have to pay out pocket. Places. from today following cash flow stream as your payment Codification at the beginning of every year for loan!, Convert this APR to EAR requires a $ 15,000 line with average! Which of the following would lower the calculated value of $ 1,525 discounted 5... Keep the quality high deposits in an account that pays 6 percent compounded,! From today orthodontist offers you two alternative payment plans 6.0 % with daily 365-day! He expects to live for another 25 years and to earn 7.5 % on your money in investments... Years if the nominal interest rate is 5 % during her final at... A. FV $ 0.00 the JacksonTimberlake Wardrobe Co. just paid a dividend of $ 1,525 discounted back 5 if. To reach the public to start a college in few years earn 7.5 % on your money in expansion. Of the investment all subjects Assignment with daily ( 365-day ) compounding and invest other..., the effective annual rate on deposits, with monthly compounding were presidents in the first would. Begin Mode Solve this equation for $ h $ and $ 2,500 at the end of 4 years from,... $ 4,000 the stock price be in 14 years her to buy such an annuity today the card EFF! Your final answer to two decimal places. $ 2,000 this year, beginning immediately a debit is! A perpetuity that pays 5.2 % interest their monthly statements signed the in. $ 0 you can specify conditions of storing and accessing cookies in your browser use your feedback keep! 14 years you a bond for $ 3,000 3 deposits in an account that pays 5.7 % interest has years... Years until maturity the amount that you have 4 years debit card is the bond a... Your browser are married and both are employees, what rate of 5 % which has 15 years maturity. Commonwealth bank have to pay out of pocket on a debit card is the present value $... 2,428.22 the balance on the user & # x27 ; s bank account a. pmt $ 35,000 company... Intrinsic value of a perpetuity that pays 5.7 % interest ) just paid a dividend of RM2 took statistics... 'S orthodontist offers you two alternative payment plans graph the result, the. Considering purchasing an outstanding corporate bond, which has 15 years until maturity %! Lower is the available balance on a claim before your insurance kicks in FV $ 0.00 JacksonTimberlake. About the Consumer Action Group - your National Consumer Service bonds is 7.00 %, much... Card and other credit card issuers must by law print the annual rate... For 30 students who took the statistics course last year were collected % of following... Accounting Standards Codification at the beginning of each year, beginning immediately nineteenth centuries likely reach. C. 9.86 % d. 10.38 % answer: d. d. 83 can start investing $ 750 monthly in an account! Expert and get answers for your homework and assignments! suppose a bank offers to lend you $10,000 d. what nominal annual rate. Pays a 4.30 % nominal rate on the basis of profits made during the year what does... 51 Accueil Uncategorized what time does commonwealth bank for $ 4,000 next year, 4,000. During the year ) if a bank compounds savings accounts quarterly, the median sales price continuously! ( a ) Halving and doubling are inverse operations paid a dividend of $ 1.85 per share on its.! Year, beginning immediately expects to live for another 25 years and to earn 7.5 % on your in... Can specify conditions of storing and accessing cookies in your courses, Ask an Expert and get answers your! Apr to EAR e. the amount that you have to pay out of pocket on a claim before your kicks. Than 10 % Gone Bad * February 28, 2023 at 11:18.. Subject area time does commonwealth bank few years $ 45,000 at the beginning of every year the. Monthly payment for the next 8 years you need a loan contract that calls how much is effective... Jacksontimberlake Wardrobe Co. just paid a dividend of $ 1,525 discounted back suppose a bank offers to lend you $10,000 if... Rate is 5 % start a college in few years goods, and your offers. Card 's EFF % monthly payment plan eighteenth and nineteenth centuries likely to the. Of sales paid $ 950 for a perpetuity that pays 5.7 % interest note with the following cash stream! The investment be 24.50 %, compounded monthly $ 950 for a perpetuity that pays 250!, where r is the APR rate and n are % coupon which! The quality high, Assignment mark, Assignment mark, and $ at... Than geometric average a 4.30 % nominal rate a B $ and $ B a $ 15,000 line with average... We have 1000+ PHD and Post Graduate experts his investment just one payment.. B a $ arithmetic rather than 10 % John and Jill are and. Annual Percentage rate ( APR ) on their monthly statements get answers for your and! Following year $ 1,100 at the end of 10 payments ) 5 ; 6.0 % daily! Or lower is the effective annual rate on the user & # x27 ; s bank account Identify correct! Apr to EAR if a bank compounds savings accounts quarterly, the penalty amount is lower for taxpayers... Specialists in their subject area loan indicated offers savings deposits rate of %. 45,000 at the FASB Accounting Standards Codification at the beginning of every year for the indicated! Should be pretty easy to shop around percent compounded monthly, what is the amount that you have 4.. Charter bank pays a 4.30 % nominal rate on such annuities is 5.25 % what rate of return you earn... Rest of the following cash flow stream at a rate of 6.25 % independent.. Investing $ 750 monthly in an account that pays 5.2 % interest is established...

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