What are the ears on two loans

Assignment Help Finance Basics
Reference no: EM132000568

Two banks in the area offer 25-year, $185,000 mortgages at 4.8 percent and charge a $3,800 loan application fee. However, the application fee charged by Insecurity Bank and Trust is refundable if the loan application is denied, whereas that charged by I. M. Greedy and Sons Mortgage Bank is not. The current disclosure law requires that any fees that will be refunded if the applicant is rejected be included in calculating the APR, but this is not required with nonrefundable fees (presumably because refundable fees are part of the loan rather than a fee).

What are the EARs on these two loans? What are the APRs? ( rounded to 2 decimal places, e.g., 32.16.)

Insecurity Bank and Trust (Refundable) I. M. Greedy and Sons Mortgage Bank (Not refundable)   

EAR     %     %  

APR     %    %

Reference no: EM132000568

Questions Cloud

Unlevered firm with debt ratio changes under assumption : A) Graph the value of a levered firm vs. an unlevered firm with debt ratio changes under each assumption.
Annual growth rate compared to the market rate : Lauren Entertainment, Inc., has an 18 percent annual growth rate compared to the market rate of 8 percent. If the market multiple is 18, determine P/E ratios
What is the target stock price in one year : Sully Corp. currently has an EPS of $2.48, and the benchmark PE ratio for the company is 20. Earnings are expected to grow at 5.5 percent per year.
If the tax rate is 34 percent the ocf for this project is : Summer Tyme. Inc.. is considering a new 6-year expansion project that requires an initial fixed asset investment of $3, 726 million.
What are the ears on two loans : What are the EARs on these two loans? What are the APRs? ( rounded to 2 decimal places, e.g., 32.16.)
Identify how themes can emerge from reading literature : This assignment is designed to help you identify how themes can emerge from reading literature and how you can synthesize this information in a way that creates
Swap rate of contract : Design a swap contract that benefits both companies. Include the swap rate of your contract. (Show your work.)
What is the interest rate on synthetic loan : Assuming that there are no transaction costs, how could you synthetically borrow ¥100,000? What is the interest rate on your synthetic loan?
What would you do to exploit quotes : What would you do to exploit these quotes? What would be your riskless profit?

Reviews

Write a Review

Finance Basics Questions & Answers

  Define the characteristics of a public-private partnership

Define the characteristics of a public-private partnership (PPP) and the efficacy of engaging in a PPP?

  What would be the aftertax cost of the call premium

What would be the aftertax cost of the call premium at the end of year 13 (in dollar value)? (Omit the "tiny_mce_markerquot; sign in your response.)

  The current shape of the u.s. treasury yield curve

1.Based on the current shape of the U.S. Treasury yield curve, do you think that now is a good time for a financially stable company to issue bonds? Why or why not?

  Explain why it does not make sense to assess consistency

Explain why it does not make sense to assess the interitem consistency of this scale. "The index of consumer sentiment toward marketing described in the appendix is formative in nature"

  What was your annual holding period ror

You buy a bond with a par value of $1000 and a coupon rate of 8% with 19 coupons remaining. You hold the bond and receive 8 coupons.

  What is the implied return on the companys stock

Earnings are expected to grow at 5 percent per year. 1) What is your estimate of the current stock price? 2)What is the target stock price in one year? 3) Assuming the company pays no dividends, what is the implied return on the company's stock ov..

  What weight should you use for debt in the computation

FarCry Industries, a maker of telecommunications equipment, has 6 million shares of common stock outstanding 4 million shares of preferred stock outstanding.

  Determine the industry to which the firm belongs

In order to be able to use industry average or benchmark to interpret a firm's performance, it is necessary to determine the industry to which the firm belongs.

  Estimate the targets maximum acquisition price

Estimate the target's maximum acquisition price. Estimate the target's maximum acquisition price when the discount rate is 7 percent and the perpetual growth rate is 5 percent.

  What alternative capital structure would you recommend

Assuming Pacific Energy Limited's credit rating is AAA, what alternative capital structure would you recommend lowering the cost of capital to the company

  Think of something you want or need for which you currently

a think of something you want or need for which you currently do not have the funds. it could be a vehicle boat horse

  An investor is in the 28 percent income tax bracket

An investor is in the 28 percent income tax bracket

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd