What is the effective annual rate on loan

Assignment Help Financial Management

Reference no: EM131992592

1. Fast Eddie's Used Cars will sell you a 2010 Mazda MR2 for $9,000 with no money down. You agree to make monthly payments for 3 years, starting one month after the sale. The interest rate on the loan is 6% APR. What is the effective annual rate on this loan?

2. GE is issuing a security called “preferred stock”. It will pay the holder a constant dividend of $1.50 every year forever. If the required return rate is 5% APR. What should be the price of this preferred stock?

3. You need $3,000 to buy a new set of tires for your car. If you have $1,200 to invest at 6% APR compounded semi-annually, how many years will you have to wait to have enough money for the new set?

Reference no: EM131992592

Questions Cloud

Comparing financial analysis applications used with wacc : Financing working capital expansions, and evaluate WACC methods comparing other financial analysis applications used with WACC.

Regional pizza restaurant chain : Assume you have just been hired as a business manager of Pizza Palace, a regional pizza restaurant chain.

Critique internal rate of return-compare to return on assets : Critique Internal Rate of Return and compare to Return on Assets, Investment, Capital, and defend best practice in assessing overall financial performance.

Calculate price of option using risk-neutral probabilities : Calculate the price of the option using risk-neutral probabilities and verify that it is the same as what you found in point (c).

What is the effective annual rate on loan : The interest rate on the loan is 6% APR. What is the effective annual rate on this loan?

What would be your required return rate on this bond : If instead you want to invest in bonds and you need an 8% risk premium based on the rating, what would be your required return rate on this bond?

Withdraw or deposit during period : You just searched internet and found the best bank C.D. account. what will be your account balance in 2027 if there is no withdraw or deposit during the period?

How much will you be willing to pay for the portfolio : If you require a risk premium of 10%, how much will you be willing to pay for the portfolio?

Making credit card purchases with only minimum payment made : What are the long term effects of making credit card purchases with only minimum payment made?

User Account

All Pages