What is effective annual interest rate on the loan

Assignment Help Financial Management
Reference no: EM131523311

Assume you take out a car loan of $8,600 that calls for 48 monthly payments of $300 each.

a. What is the APR of the loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Use a financial calculator or Excel.) APR %

b. What is the effective annual interest rate on the loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) EAR %

Reference no: EM131523311

Questions Cloud

What is the most likely npv for one scanner : What is the most likely NPV for one scanner? What is the IRR for one scanner?
Strategic valuation and shareholder value analysis : Operating Leverage-Strategic Valuation and Shareholder Value Analysis
Contribute per month to reach her goal : How much money does she need to contribute per month to reach her goal?
Should the plant purchase the new aeration system : A small wastewater treatment plant is using a subsurface are ration system for his sludge aeration. Should the plant purchase the new aeration system? Discuss.
What is effective annual interest rate on the loan : What is the effective annual interest rate on the loan? What is the APR of the loan?
Internal rate of return? method and their? requirements : Using the internal rate of return? (IRR) method and their? requirements, determine whether Billy and Mandy should undertake the investment.
Undertake to generate an acceptable return on her porfolio : Katherine Wilson is wondering how much risk she must undertake to generate an acceptable return on her porfolio.
Create conflict of interest for a university : Does the existence of an affinity credit card create a conflict of interest for a university
What is the present value of payment : What is the present value of a $1,550 payment made in seven years when the discount rate is 9 percent?

Reviews

Write a Review

Financial Management Questions & Answers

  Replacing deposit drain with interest-bearing liabilities

A DI has assets of $10 million consisting of $1 million in cash and $9 million in loans. The DI has core deposits of $6 million, subordinated debt of $2 million, and equity of $2 million. What will be the size of the DI after the drain if the DI uses..

  Firms recent earnings per share and dividend per share

Suppose that a firm’s recent earnings per share and dividend per share are $2.90 and $1.90, respectively. Both are expected to grow at 9 percent. However, the firm’s current P/E ratio of 28 seems high for this growth rate. The P/E ratio is expected t..

  How do you calculate the cost of electricity

Utility company in one of the western states is considering the addition of 50 megawatts of generating capacity to meet expected demands for electrical energy by the year 2016. This assumes that brownouts will occur during high demand periods. Projec..

  What is the future value of this prize

What is the future value of this prize if each payment is put in an account earning 0.10?

  Investor regard both opportunities as being equivalent

Two mutually exclusive investment opportunities require an initial investment of $5 million. Investment A generates $1.5 million per years in perpetuity, while investment b pays $1 million in the first year, with cash flows increasing by 3% per year ..

  Defined as the par value of common stock

What is the maximum amount that Beta Corporation can pay in cash dividends, without impairing its legal capital, if it is headquarter in a U.S. state where capital is defined as the par value of common stock?

  Best describes the experience curve

Which of the following best describes the “experience curve”?

  What will your homemade dividend be in two years

You own 1,100 shares of stock in Avondale Corporation. You will receive a $2.40 per share dividend in one year. In two years, Avondale will pay a liquidating dividend of $72 per share. What will your homemade dividend be in two years?

  Recommend new heating system to commercial building owner

A mechanical engineer must recommend a new heating system to a commercial building owner. The owner intends to sell the building in 15 years. A gas fired furnace option has a design life of 5 years, an initial cost of $12,000, a replacement cost of $..

  Estimate the expected return on thorndike oil equity

Estimate the expected return on TO’s equity. Issue $55 million immediately in debt and maintain its level in perpetuity.

  Why do you think a company would issue this type of bond

The Wall Street Journal reports a bond price of $582.50. These bonds are convertible into common stock. Why do you think a company would issue this type of bond?

  Used for the common stock in the computation of Team WACC

Team Sports has 6 million shares of common stock outstanding, 1 million shares of preferred stock outstanding, and 200 thousand bonds ($1,000 par). If the common shares are selling for $24.50 per share, the preferred share are selling for $20 per sha..

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