Question

use the tables of compound interest to look up the value of the factors. Do not...

use the tables of compound interest to look up the value of the factors. Do not use the interest formulas.

A student borrowed $10,000 from a bank. He must pay $400 at the end of each month for the next 30 months.

  1. What is the monthly interest rate he is paying?
  2. What is the effective annual interest rate he is paying?
Engineering   Civil-Engineering   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A student borrowed $8600 from the bank. She must pay $300 at the end of every...
A student borrowed $8600 from the bank. She must pay $300 at the end of every month for 5 years. What is the effective annual interest rate on the loan?
The York Company has arranged a line of credit that allows it to borrow up to...
The York Company has arranged a line of credit that allows it to borrow up to $52 million at any time. The interest rate is .628 percent per month. Additionally, the company must deposit 6 percent of the amount borrowed in a non-interest bearing account. The bank uses compound interest on its line-of-credit loans. What is the effective annual rate on this line of credit?
A local finance company quotes a 20% interest rate on a one year loan. If you...
A local finance company quotes a 20% interest rate on a one year loan. If you borrow $10,000, the interest for the year will be $2,000. Because you will pay a total of $12,000, the finance company requires that you pay $1,000 per month over the next 12 months with the first payment in one month. Is this a 20% loan? Find the effective annual interest rate on this loan.Find the annual interest rate compounded monthly.
a) "Clay borrowed $32,000 from a bank at an interest rate of 11.16% compounded monthly. The...
a) "Clay borrowed $32,000 from a bank at an interest rate of 11.16% compounded monthly. The loan will be repaid in 72 monthly installments over 6 years. Immediately after his 48th payment, Clay desires to pay the remainder of the loan in a single payment. Compute the total amount he must pay." b) "Suppose that $5,000 is placed in a bank account at the end of each quarter over the next 7 years. What is the future worth at the...
Colson Company has a line of credit with Federal Bank. Colson can borrow up to $403,000...
Colson Company has a line of credit with Federal Bank. Colson can borrow up to $403,000 at any time over the course of the 2018 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first four months of 2018. Colson agreed to pay interest at an annual rate equal to 2.50 percent above the bank’s prime rate. Funds are borrowed or repaid on the first day...
Show all calculations. You must use the factors from the tables a. Steve Allen invested $12,000...
Show all calculations. You must use the factors from the tables a. Steve Allen invested $12,000 today in a fund that earns 8% interest. If the interest compounds semiannually, what amount will the investment grow to in 6 years? Answer $_____________________ b. A machine is purchased by making 6 payments of $8,000 each at the beginning of each year (starting at the time of the purchase). Assuming an annual interest rate of 10%, at what cost should the machine be...
Business Applications. Find the future value (compound amount) or the compound interest, as indicated. Round answers...
Business Applications. Find the future value (compound amount) or the compound interest, as indicated. Round answers to the nearest cent. Use a calculator or Table 16-1 to find FVF. Please put the entire solution for each question. Thank you 16. Brent Davis thinks that he needs to borrow $6,600 for 2.5 years. He doesn’t have a very good credit rating, so most finance companies want to charge him a high interest rate. He finally finds a lender that will loan...
1. A man has a loan of 50,000 in a bank that gives 12% simple interest....
1. A man has a loan of 50,000 in a bank that gives 12% simple interest. How much is the interest if he plans to pay after 5 years? 2. A man can save 10,000 per month for 2years, If the bank offers 5% compounded monthly, what is n? 3. A man has a loan of 50,000 in a bank that gives an interest rate of 12% compounded quarterly? If he plans to pay after 6months, how much is the...
Singer Company has a line of credit with United Bank. Singer can borrow up to $374,000...
Singer Company has a line of credit with United Bank. Singer can borrow up to $374,000 at any time over the course of the Year 1 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first three months of Year 1. Singer agreed to pay interest at an annual rate equal to 2.00 percent above the bank’s prime rate. Funds are borrowed or repaid on the...
You’ve worked out a line of credit arrangement that allows you to borrow up to $10,000...
You’ve worked out a line of credit arrangement that allows you to borrow up to $10,000 at any time. The interest rate is 0.75% per month. In addition, 2% of the amount that you borrow must be deposited in a noninterest-bearing account. a) What is the Effective Annual Rate on this lending arrangement? b) Suppose you need $8,000 today and you repay it in 9 months. How much interest will you pay?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT