What is effective annual rate on the loan

Assignment Help Financial Management
Reference no: EM131606052

Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $170.00 at the end of each quarter and then pay off the principal amount at the end of the year. What is the effective annual rate on the loan?

Reference no: EM131606052

Questions Cloud

Fixed rate mortgage without refinancing over mortgage term : What is the Monthly Mortgage Payment? if both borrowers have a 30-Year Fixed Rate Mortgage without refinancing over the mortgage term?
Project is funded matters to capital budgeting decision : Explain why the manner in which a project is funded matters to a capital budgeting decision?
What economic variables are important risk proposed project : Explain how an analyst can determine what economic variables are important risk a proposed project.
About investing in that country capital markets : The stronger the legal structure of a country, more willing are investor (domestic and foreign) about investing in that country's capital markets.
What is effective annual rate on the loan : What is the effective annual rate on the loan?
Use to estimate the horizon value of proposed project : Describe two different methods an analyst can use to estimate the horizon value of a proposed project.
Compute the price of the bond at the dates : Compute the price of the bond at the following dates: 01/2014, 10/2014, 04/2015. Assume that interest rate is 5% for all the time periods.
Economic variables are risk factors for proposed project : Explain how an analyst can determine what economic variables are important risk factors for a proposed project.
Describes the manner in which project funded : what is the term that describes the manner in which project funded?

Reviews

Write a Review

Financial Management Questions & Answers

  Compute the yield to maturity of value bond with coupon rate

Compute the yield to maturity of a $2,500 par value bond with a coupon rate of 7.95% (quarterly payments – that is, four times per year) that matures in 25 years. The bond is currently selling for $3,265.

  Initial investment in fixed assets when evaluating project

What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? Why?

  What is the effective interest rate on the LIBOR loan

Dr. Ruth is going to borrow $9,800 to help write a book. The loan is for one year and the money can either be borrowed at the prime rate or the LIBOR rate. Assume the prime rate is 9 percent and LIBOR 2.5 percent less. What is the effective interest ..

  The annual debt service payment

Assume the rate on the issuance of $100m of 100-year bonds is 7.5%; the annual debt service payment would be $7.505m. How high would the interest rate have to be on 30-year bonds for the annual debt service payment to be the same for both financings?

  What is net income for this firm

What is the net income for this firm?

  Required return must investors be demanding on storico stock

Storico Co. just paid a dividend of $1.30 per share. The company will increase its dividend by 20 percent next year and will then reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 percent divid..

  What is the return on investment

Jane Lee opens a brokerage account, and purchases 300 shares of ABC at $40 per share. She borrows $4000 from her broker to help pay for the purchase. a. What is the margin on Jane’s account when she first purchases the stock? b. If the share price fa..

  How much will the business receive from the bank

A busness accepted a note of 9000 plus 1000 service fee to be paid in 12 months. how much will the busness recieve from the bank?

  How does federal budget deficit affect interest rates

How does Federal budget deficit affect interest rates? What about Federal budget surplus? What are the benefits, costs and risks of an aggressive funding strategy and of a conservative funding strategy? Mackery, Inc., has an outstanding issue of pref..

  About the constant growth valuation

Woidtke Manufacturing's stock currently sells for $32 a share. The stock just paid a dividend of $2.25 a share (i.e., D0 = $2.25), and the dividend is expected to grow forever at a constant rate of 4% a year. What stock price is expected 1 year from ..

  What is intrinsic value of deployment specialists stock

If the required return for Deployment Specialists is 8.5%, what is the intrinsic value of Deployment Specialists stock?

  What is the value of the total position

Rock Solid has a stock portfolio worth $100 million, which tracks closely with the S&P 500. What is the value of the total position?

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