Finding the cheaper loan, Suppose your uncle Fred just

Finding the cheaper loan

Reference no: EM1357060

Your uncle Fred just purchased a new boat. He brags to you about the low 7% interest rate (APR, monthly compounding) he obtained from the dealer. The rate is even lower than the rate he could have obtained on his home equity loan (8% APR, monthly compounding). If his tax rate is 25% and the interest rate on the home equity loan is tax deductible, which loan is truly cheaper? Please show in excel.

Reference no: EM1357060

Questions Cloud

Compute current price of the common stock : Rentz RV Inc. is presently enjoying relatively high growth because of a surge in demand for recreational vehicles. Management expects earnings and dividends to grow at a rate of 25 percent for next four years

Relationship between human development and socialization : Discuss the relationship between human development and socialization and how this relationship is affected by Post Traumatic Stress Disorder. Include cultural implications as well.

With what speed does electron leave the hole : A man weighing 650 and a woman weighing 440 have same momentum. What is the ratio of the man's kinetic energy to that of the woman.

Find the cost minimizing order quantity : Explain what is the minimum cost order quantity for the shoes and what are the annual savings of your inventory policy over the policy currently being used by Keith?

Finding the cheaper loan : Suppose your uncle Fred just purchased a new boat. He brags to you about the low 7 percent interest rate he obtained from the dealer. The rate is even lower than the value he could have obtained on his home equity loan

Test items or questions developed for ptsd : What type of test items or questions can be developed for PTSD? What questions can be used? Please help me understand test items to evaulate test scores.

Balancing intercompany payables-receivables : What is the impact of not balancing intercompany payables/receivables on a monthly basis? What is the impact on not eliminating intercompany payables/receivables during the consolidation?

Family and medical leave act in an industrial workplace : What employers are and are not covered by the FMLA what employees are exempt from coverage, how does FMLA relate to a manager's duties, e.g., scheduling

Prepare journal entry-income statement : The following information has been obtained for the Kerdyk Corporation. Compute taxable income and income tax payable for 2007.

User Account

All Pages