Effective annual return on its consumer loans

Assignment Help Financial Management

Reference no: EM131043506

Magnus Credit Corp. wants to earn an effective annual return on its consumer loans of 15.5 percent per year. The bank uses daily compounding on its loans. Required: What interest rate is the bank required by law to report to potential borrowers? (Round your answer as directed, but do not use rounded numbers in intermediate calculations. Use 365 days in a year. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) Interest rate %

Reference no: EM131043506

Questions Cloud

What is the EAR on this loan : You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 37-year mortgage loan for 85 percent of the $3,270,000 purchase price. The monthly payment on this loan will be $16,000. Requirement 1: What is the APR on this lo..

Expense needs over the next four years : Beginning three months from now, you want to be able to withdraw $4,000 each quarter from your bank account to cover college expenses over the next four years. Required: If the account pays .8 percent interest per quarter, how much do you need to hav..

How long will it take for the account to be paid off : One of your customers is delinquent on his accounts payable balance. You’ve mutually agreed to a repayment schedule of $660 per month. You will charge 1.06 percent per month interest on the overdue balance. Required: If the current balance is $14,880..

What will your monthly payment be : You want to buy a new sports car from Muscle Motors for $30,800. The contract is in the form of a 36-month annuity due at an APR of 5.85 percent. Required: What will your monthly payment be?

Effective annual return on its consumer loans : Magnus Credit Corp. wants to earn an effective annual return on its consumer loans of 15.5 percent per year. The bank uses daily compounding on its loans. Required: What interest rate is the bank required by law to report to potential borrowers?

Match first simple bank over an investment horizon : First Simple Bank pays 9.8 percent simple interest on its investment accounts. First Complex Bank pays interest on its accounts compounded annually. Required: What rate should the bank set if it wants to match First Simple Bank over an investment hor..

Effective annual return-return on this investment vehicle : Maybepay Life Insurance Co. is selling a perpetual annuity contract that pays $2,800 monthly. The contract currently sells for $328,000. Requirement 1: What is the monthly return on this investment vehicle? What is the APR? What is the effective annu..

Appropriate discount rate-what is the present value : An investment will pay you $88,000 in six years. Assume the appropriate discount rate is 8 percent compounded daily. Required: What is the present value?

Interest compounded monthly : You’re prepared to make monthly payments of $185, beginning at the end of this month, into an account that pays 12 percent interest compounded monthly. Required: How many payments will you have made when your account balance reaches $52,000?

User Account

All Pages