What rate of interest are you charging your friend

Assignment Help Financial Management
Reference no: EM131848049

1. A friend wants to borrow $600 from you and promises to pay you back in 5 years. You tell him that in five years he will have to pay you $700. What rate of interest are you charging your friend?

2. You currently have $10,000 and invest it at a rate of 5% per year. How long will it take for your investment to reach $20,000? $30,000?

Reference no: EM131848049

Questions Cloud

What is the capital intensity ratio : Discount Outlet has net income of $389,100, a profit margin of 2.8 percent, and a return on assets of 8.6 percent. What is the capital intensity ratio?
What is the most you should pay for this investment : You can earn 12 percent on very similar investments. What is the most you should pay for this investment?
River cruises is all-equity-financed : River Cruises is all-equity-financed with 100,000 shares. What is the ratio of price to expected earnings for River Cruises before it borrows the $240,000?
What is your effective annual interest rate : If you keep the mortgage until it is paid off in 30 years, what is your effective annual interest rate?
What rate of interest are you charging your friend : You tell him that in five years he will have to pay you $700. What rate of interest are you charging your friend?
What is the present value of these cash inflows : What is the present value of these cash inflows at a discount rate of 8%?
Bought corporate bond with the time to maturity : Two years ago Hillary bought a corporate bond with the time to maturity of 8 years, yield to maturity of 10%, and face value of $1,000.
What is the current value of one-year european call option : Using a one-step binomial tree, what is the current value of a one-year European call option on XYZ with an exercise price of $12?
Difference in liquidity risk premiums between the two bonds : Based on this information, and the knowledge that the difference in liquidity risk premiums between the two bonds is 0.50%,

Reviews

Write a Review

Financial Management Questions & Answers

  Ways in which citicrop could facilitate gretz flow of fund

Explain the various ways in which Citicrop could facilitate Gretz's flow of funds and identify the type of financial market where that flow of funds occurs. For each type of financing transaction, specify whether Citicrop would serve as the credit..

  Portfolio diversification reduces variability of returns

Which of the following statements is correct? Portfolio diversification reduces the variability of the returns on the individual stocks held in a portfolio. Portfolio A has but one security, while Portfolio B has 100 securities.

  Analysis offers over traditional ratio analysis

What is an advantage that the Du-Pont system of analysis offers over traditional ratio analysis?

  What is meant by rolling hedge forward

What is meant by rolling a hedge forward? What factors go into choosing the particular contract used for hedging?

  Decreasing inventory turnover ratio indicate about firm

What does a decreasing inventory turnover ratio likely indicate about a firm?

  Merger bid

Harrison Corporation is interested in acquiring Van Buren Corporation. Assume that the risk-free rate of interest is 5% and the market risk premium is 7%. If Harrison were to acquire Van Buren, what would be the range of possible prices that it could..

  What is the best-case operating cash flow

You are analyzing a project and have developed the following estimates. The depreciation is $3,200 a year and the tax rate is 34 percent. What is the best-case operating cash flow?

  Tax situation could change in investment portfolio planning

Describe tax situation and explain how one's tax situation could change in Investment Portfolio planning

  Economic analysis to compare two different automobiles

A wise consumer decides to perform an economic analysis to compare two different automobiles intended for use over the next 8 years.

  What is the yield to maturity

A Treasury STRIPS is quoted at 61.159 and has 10 years until maturity. What is the yield to maturity?

  What is the net present value of project

Bank of America has offered to lend you $850,000 at an interest rate of 6% to be repaid over 5 years. If your cost of capital (discount rate) is 10% what is the net present value of this project?

  What is maximum amount you will pay for new process

A manufacturer makes 7,900,000 bottles of supplements per year. Each bottle takes 0.4 minutes of direct labor at the rate of $8 per hour. The overhead costs are estimated at $11 per direct labor hour. The new process will reduce the unit production 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