What is the effective annual rate of interest

Assignment Help Corporate Finance

Reference no: EM13997866

USE the factors to express all patterns of flow in your equations. SHOW ALL YOUR WORK. Write clearly and indicate your solution. Attach your solutions to this page in order.

1. A local store has charge accounts for regular customers. They bill monthly and charge 1.75% per month on the unpaid balance in any account.

a. What is the APR they are charging?

b. What is the effective annual rate of interest?

2. The following table shows the amount borrowed and the partial payment schedule to repay the loan. The last payment shown as B is sometimes called a baloon payment. Write the equation to solve for B using the factors to express the solution. Your answer will be in the form B = .

period	amount
0	500
1	-50
2	-100
3	-150
4	-200
5	-B

3. The following cash flow diagram shows the plan to spend development money, amount D. over 4 periods and then begin to receive revenue during the following 4 periods.

1071_Cash flow diagram.jpg

Using the factors, write the equation for present worth that will determine how much development money. D, can be spent each period and have PW(0) = 0 if i = .06 for the 8 periods?

4. Given: PW(0) = -7500 + 200(P/A, .06, 10) + 300(P/A, g = .04, .06, 8) + 750(P/F, .06, 9).

a. Draw the cash flow diagram

b. Compute the value of PW(0).

Reference no: EM13997866

Questions Cloud

A senior information technology analyst : You are a senior information technology analyst at your company. Your company has 250 employees. Each employee has his or her own terminal to access the company's network. There are also 10 wireless access points to support access for portable device..

What conclusions can you draw from the experiment : What conclusions can you draw from this experiment? Draw free body diagrams for the hanging mass m1 and any attached pulleys for each of the three investigations.

Difference between identification and authentication : Provide a definition of the following terms and expression. 2. What is the difference between Identification and Authentication? 3. rovide four examples of computer crime. 4. What are the key principles of Network Security?

Compute magnitude and direction of resultant electric force : Calculate the magnitude and direction of the resultant electric force exerted on the charge at the lower left corner by the other three charges.

What is the effective annual rate of interest : What is the APR they are charging - what is the effective annual rate of interest and draw the cash flow diagram

Describe a business that would like to start : Describe a business that would like to start discuss how you would use global outsourcing to accomplish yourgoals

For a one-to-many relationship between tables of project : For a one-to-many relationship between tables of Project and Employee, if the minimal cardinality is as following situations, discuss the way to ensure the data integrity when data is inserted, modified and deleted. (Note, you may draw a table to ill..

Describe pros and cons of vaccines : Vaccinations are mandatory for most babies and school-aged children as they build the body's immune response. Describe two (2) pros and two (2) cons of vaccines

What is the speed of the alpha particle : Atomic particles are often characterized by their kinetic energy in MeV. What is the speed of the alpha particle with a 5.0MeV kinetic energy?

User Account

All Pages