What is the effective annual rate

Reference no: EM13266719

Cull Incorporated recently borrowed $250,000 from Century Bank when the prime rate was 4%. The loan was for 90 days with interest to be paid at the end of the period with a rate fixed at 1.5% above the prime rate. What is the total interest paid on this loan and what is the effective annual rate? (Assume a 365 day year.)

A) The total interest paid is $3390.41 and the effective annual rate is 5.62%.
B) The total interest paid is $13,750 and the effective annual rate is 5.62%.
C) The total interest paid is $13,750 and the effective annual rate is 5.55%.
D) The total interest paid is $3390.41 and the effective annual rate is 1.36%.

Reference no: EM13266719

Questions Cloud

Obtain the tension on the cord : A 0.38-kg cord is stretched between two supports,7.6m apart. When one support is struck by a hammer, What is the tension on the cord

Design and build project : Design and Build (D&B) project form of contract has gained increased recognition, particularly in the construction industry, in the last decade (Lam, Chan and Chan, 2008).

Public relations are practice of good-quality communication : Public relations (PR) are the practice of good-quality communication between a company and the public. Conduct research to locate an effective example of public relations and an ineffective example of PR. Provide your examples in the discussion board..

What are the two product segments : What are the two product segments? Gather data about eachsegment%u2019s net sales, operating income, and identifiableassets. Calculate ROI for each segment. Which segment has the highest ROI? Explain why.

What is the effective annual rate : Cull Incorporated recently borrowed $250,000 from Century Bank when the prime rate was 4%. The loan was for 90 days with interest to be paid at the end of the period with a rate fixed at 1.5% above the prime rate.

Determine the binding energy of the last neutron : Determine the binding energy of the last neutron in a 2311Na nucleus. The masses of the neutral atoms of 2311Na and 2211Na are 22.989770 u and 21.994437 u

Find what is the developed torque at the output : A 5 horsepower dc mahine is supplied with 120 V dc and delivers rated power at 1000 rpm. The machine has an efficiency of 80 %. What is the developed torque at the output

How much money will you have in savings : How much money will you have in savings when you retire in 15 years from now?

Obtain the angular acceleration : When a turntable rotating at 45 rev/min is shut off, it comes to rest in 20 s. Find the angular acceleration

User Account

All Pages