What is the effective interest rate on loan

Assignment Help Financial Management
Reference no: EM131910793

The Kellogg Bank requires borrowers to keep an 8 percent compensating balance. Gorman Jewels borrows $270,000 at a 4.0 percent stated APR. What is the effective interest rate on the loan? (Round intermediate calculations to 4 decimal places, e.g. 1.2541 and final answer to 2 decimal places, e.g. 12.25%.)

The effective interest rate on the loan is _________%

Reference no: EM131910793

Questions Cloud

Examines the role of front-line public employees : "Street-Level Bureaucracy: The Critical Role of Street-Level Bureaucrats" examines the role of front-line public employees in the bureaucracy.
Calculate financial break-even quantity : This problem concerns the effect of taxes on the various break-even measures. Calculate the financial break-even quantity.
Explain the concept of accrual accounting : FNSACC301 Process financial transactions and extract interim reports Assignment. Explain the concept of accrual accounting
Recognize similarities and differences between organizations : The CEO of your organization has asked you to write what you have learned so far so he can convince the Governing Board that you are more than worthy.
What is the effective interest rate on loan : Gorman Jewels borrows $270,000 at a 4.0 percent stated APR. What is the effective interest rate on the loan?
What are the savings from using the lockbox : If the firm’s opportunity cost on savings is 4.90 percent, what are the savings from using the lockbox?
Write paper on algorithms and application uses of hashing : Write 2 page paper APA formatted double spaced with references on purpose, algorithms and application uses of hashing.
What will be the firm after-tax cost of debt on the bond : The Company is in a 20 percent tax bracket. What will be the firm's after-tax cost of debt on the bond?
Benefits mentioned was employee stock options : During your interview process, one of the benefits mentioned was employee stock options.

Reviews

Write a Review

Financial Management Questions & Answers

  Summarize additional exclusions and limitations contained

Briefly summarize the additional exclusions and limitations contained in the Special Cause of Loss Form.

  What would be the cost of the new equity

Banyan Co.'s common stock currently sells for $43.00 per share. The growth rate is a constant 8.4%, and the company has an expected dividend yield of 2%.The expected long-run dividend payout ratio is 30%, and the expected return on equity (ROE) is 12..

  Calculate the value of a three month european put

The risk-free rate of interest is 7% per annum and the index provides a dividend yield of 4% per annum.- Calculate the value of a three-month European put with an exercise price of 700.

  Perform search on acquisition strategy

Perform a search on "acquisition strategy." Identify at least two companies in different industries that are using acquisitions to strengthen their market positions. How have these acquisitions enhanced the acquiring companies' competitive capabiliti..

  What real amount must you deposit each year to achieve goal

You want to have $4 million in real dollars in an account when you retire in 20 years. The nominal return on your investment is 14 percent and the inflation rate is 3.8 percent. What real amount must you deposit each year to achieve your goal?

  Firms target capital structure-debt and common equity

You are given the following data for a company: Cost of debt = 8%, cost of retained earnings = 12%, cost of new common equity = 14%, tax rate = 35% and retained earnings = $1000. The firms target capital structure is 40% debt and 60% common equity.

  What is the rate of return on total invested-retirement plan

A publicly traded consulting engineering firm has a retirement plan wherein the company will match an employee’s stock purchases up to $ 5,000 per year, provided the employee has been with the firm for at least 10 years. If an employee hired 10 years..

  Compute the roe using the dupont model

James Trading Corporation Balance Sheet December 31, 20XX Assets $ Liabilities and Equity $ Cash 23,015. Compute the ROE using the DuPont Model.

  Company overall market value to change due to the split

When Tandy (RadioShack) Corporation announced a 2:1 stock split, the company had 97 million shares outstanding, trading at $100 per share.a. Estimate the number of shares outstanding and market price per share immediately after the split.b. Estimate ..

  Fortune magazine with sticky note marking

You notice that the time is getting late and you decide to leave the office for the day, satisfied with your work thus far at Shefrain Consulting. Prior to leaving the office you check your company mailbox for the first time and notice a copy of Fort..

  How much money was left on the table

Price per share at the end of the first day is $16.50. The current price is $20. How much money was left on the table?

  What is the npv of this investment

You have an opportunity to invest $107,000 now in return for $79,000 in one year and $30,000 in two years. what is the NPV of this investment?

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