What is the effective annual interest rate

Assignment Help Financial Accounting
Reference no: EM133328205

Case: Western Union has granted GAMING Ltd a line of credit that allows it to borrow up to $50 million at any time. The interest rate is .47% per month. But GAMING Ltd is required to have 4% of the borrowed amount deposited in a non-interest-bearing account. Assume the bank uses compound interest on its line of credit loans. Show your work on the following:

Question 1: What is the effective annual interest rate on this lending arrangement?

Question 2: Suppose GAMING Ltd need $9 million today and repay it it in six months. How much interest will it pay?

You must solve the question in Excel and submit your Original Excel file showing the formulas. Failure to do so will result in 0.

Reference no: EM133328205

Questions Cloud

What is the balance of accumulated depreciation : Belmont has a December 31 year end. What is the balance of accumulated depreciation for this asset at December 31, Y5
What endowment should a typical person choose : what endowment should a typical person choose? Assume the interest rate increases to 15%. Which endowment should a typical person now choose?
Eye movement desensitization and reprocessing : What is Eye Movement Desensitization and Reprocessing (EMDR). what population have try this?
What ratios can be used to assess liquidity of a business : What ratios can be used to assess the liquidity of a business? What ratios can be used to assess the profitability of a business?
What is the effective annual interest rate : What is the effective annual interest rate on this lending arrangement? Suppose GAMING Ltd need $9 million today and repay it it in six months. How much
How this program would help the canadian economy : The Canada Emergency Response Benefit (CERB) is the largest stimulus package in history. How does it work? And How this program would help the Canadian economy
Compute the corporations non-capital loss for current year : ACC 653 Seneca College Compute the corporation's non-capital loss for the current year - JST Limited has computed the following income (loss) for the year ended
Quantities of plain water in short period of time : Explain the potential risk to a person who drinks unusually large quantities of plain water in a short period of time.
Would decide in favor of protagoras or in favor of euathlus : If you were serving on the jury on this case, would you decide in favor of Protagoras or in favor of Euathlus? Explain your answer.

Reviews

Write a Review

Financial Accounting Questions & Answers

  What bramble total labor variance is

What Bramble's total labor variance is? Bramble has a standard of 2 hours of labor per unit, at $12 per hour. Bramble used 6250 hours of labor at a total cost

  Calculate tarass inc alternate minimum tax

Calculate Tarass Inc. s alternate minimum tax for 2013, if any applies and the calculation must be shown to receive full credit.

  Represent potential problem with financial statement

Which of the following does not represent a potential problem with financial statement analysis?

  Calculate the inventory turnover ratio of the company.

Zebra, Inc. cost of goods sold for the year is? $2,300,000, and the average merchandise inventory for the year is? $139,000. Calculate the inventory turnover ratio of the company.?

  What amount of impairment loss is allocated for jyd corp

Before the date of reclassification, the property, plant and equipment. What amount of the impairment loss is allocated to the goodwill?

  Determining the cost of the product under abc costing and

determining the cost of the product under abc costing and traditional costing method.your company makes both widgets

  Find out the ordering-holding and total inventory costs

It costs approximately $20 to place an order the supplier currently order 100 batteries per month. Find out the ordering, holding, and total inventory costs for the current order quantity

  Record the disposals

Record the disposals. Traded in an old vehicle for a new vehicle, receiving a $10,000 trade-in allowance and paying $36,000 cash.

  Prepare a statement of cash flows for the year

Colorado Corporation was organized at the beginning of the year, with the investment of $250,000 in cash by its stockholders. Prepare a statement of cash flows

  Evaluate lombard company internal control system

Evaluate Lombard Company's internal control system and indicate which principles of internal control appear to have been ignored in this situation.

  HA2032 Corporate and Financial Accounting Assignment

HA2032 Corporate and Financial Accounting Assignment Help and Solution, Holmes Institute - Assessment Writing Service - different sources a company can use.

  What is the dollar price of the bond

Lion Corp. has a $5,000 par value bond outstanding with a coupon rate of 4.8 percent paid semiannually. What is the dollar price of the bond

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