What is the effective annual rate on this loan

Assignment Help Financial Management
Reference no: EM131446133

Bob's Bank has offered you a $40,000 mortgage on a house. Payments are to be $374.90 per monht for 30 years. Please include equations used to solve this problem..

a. What effective monthly interest rate is Bob charging?

b. What is the APR on this loan?

c. What is the effective annual rate on this loan?

Reference no: EM131446133

Questions Cloud

When would it make sense to abandon the investment : We are examining a new project. We expect to sell 7,000 units per year at $38 net cash flow per unit for the next 10 years. The relevant discount rate is 16%, and the initial investment required is $1,040,000. What is the base-case NPV? If expected s..
Review the case study of vehicle assembly : Alpha Alliance, a large automobile manufacturing company, organises the vehicles  it manufactures into three families: a family of trucks, a family of small cars, and a family of midsized and luxury cars.
Conceptual model to logical and physical model status : This data model will be reviewed and taken from the conceptual model to logical and physical model status.
The effects of changes in net working capital : Your subordinate just submitted a proposal. You find that the analysis is correct except that it has ignored net working capital. You expect net working capital to be $450,000 at time 0, $900,000 from year 1 to year 4, $750,000 from year 5 to year 9 ..
What is the effective annual rate on this loan : Bob's Bank has offered you a $40,000 mortgage on a house. Payments are to be $374.90 per monht for 30 years. Please include equations used to solve this problem. What effective monthly interest rate is Bob charging? What is the APR on this loan? What..
What is the skewness statistic for age at enrollment : Plot the frequency distribution for "Age at Enrollment" by hand or by using SPSS.How would you characterize the Skewness of the distribution in Question 1-positively skewed, negatively skewed, or approximately normal? Provide a rationale for your a..
How rhetoric is demonstrated in your discipline : The point of the assignment is to explore a topic in more depth and relay what you have learned in a structured, formal argument or research paper.
What is the internal rate of return on this investment : The cash flows from a project is as follows: (Year 0 -3000), (Year 1 1000), (Year 2 1000), (Year 3 3000) What is the actual (annualized) return on investment if we assume that intermediate cash flows can be reinvested at 10%? What is the internal rat..
Why is an appraisal important when buying a home : Why is an appraisal important when buying a home? and What are some of the costs associated with buying a home? What are some of the other fees and charges that get added to a home loan on top of the interest we pay? Please provide examples?

Reviews

Write a Review

Financial Management Questions & Answers

  Shares of stock outstanding at a market price

Joe and Co., an online options broker, is an all equity firm with 60,000 shares of stock outstanding at a market price of $50 a share. The company has earnings before interest and taxes of $87,000. How many shares of stock will you continue to own if..

  What is the minimum number of bonds it must sell to raise

The MerryWeather Firm wants to raise $10 million to expand its business. To accomplish this, it plans to sell 30-year, $1,000 face value zero-coupon bonds. The bonds will be priced to yield 6%. What is the minimum number of bonds it must sell to rais..

  How do you construct the synthetic futures position

How do you construct the synthetic futures position; how much must you borrow or lend? - What is your expected profit if you believe the share price will be $42 six months from now?

  Calculate the coefficient of variation

Calculate the coefficient of variation for the following three stocks. Then rank them by their level of total risk, from highest to lowest:

  Make to record the sale of the equipment

Carey Enterprises sold equipment on January 1, 2015 for $10,000. The equipment had cost $48,000. The balance in Accumulated Depreciation at January 1 is $40,000. What entry would Carey make to record the sale of the equipment?

  Mortgage rate-bank offers two options for payment

You plan to purchase a house for $115,000 using a 30 year mortgage pbtained from your local bank. You will make a down payment of 20 percent of the purchase price. You will not pay off the mortgage early. Which option should you choose?

  World of perfect capital markets

Consider a world of perfect capital markets.  This world has no corporate or personal taxes, all investors have homogeneous expectations, no bankruptcy costs, and M&M's no-tax theory of capital structure is true.

  What is the industry average price earnings ratio

What is the industry average price-earnings ratio? What is Ragan's price-earnings ratio? Comment on any differences and explain why they may exist.

  Bond characteristics-coupon rate and maturity of bond

You purchase today a callable annual coupon rate bond under the following conditions: Bond characteristics: Coupon rate: 7.5% Maturity of bond: 20 years Call Premium: 8% Time to call period: 4 years Current YTM: 8.5% Expected hold assumptions: Expect..

  What is the average level of the companys free trade credit

A firm purchases $4,562,500 in goods over a 1 year period from its sole supplier. The supplier offers trade credit under the following terms: 2/15, net 50 days. Davis finally chooses to pay on time (pay in the 50th day) but not to take the discount. ..

  Determine the amount of the lease payments

Delta Company sells high-end laser printers for $5,000 each. They also offer the option to lease the printers for 5 years. The computers cost Delta $3,500 to manufacture. Determine the amount of the lease payments, as determined by Delta. Provide the..

  Additional net working capital investments each year

Net working capital is 1,500,000; additional net working capital investments each year (starting in year 1) equal to 15% of the projected sales increase for the following year. Decreases in sales will result in recovery of net working capital equal t..

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