What would be the value of the loan

Assignment Help Financial Management

Reference no: EM132026992

A company borrowed $10 million for five years form Atlantic Bank. The company pays Atlantic Bank a fixed annual rate of 8 percent and must pay back the $10 million loan at the end of the borrowing period. A year has passed since the loan was made and Atlantic Bank wants to sell the loan to pacific bank.

a. If the interest rate is now 7 percent, what is the value of the loan?

b. What would be the value of the loan if the company is paying the bank 4 percent every 6 months instead of 8 percent per year?

Please list all steps

Reference no: EM132026992

Questions Cloud

Percentage of the economic burden of the tax : The price elasticity of demand for bobble heads is -2; the price elasticity of supply is 3. How much will the price of bobble heads change with a unit tax of $1

How do you calculate amihud ratio daily : How do you calculate Amihud ratio daily? How do you calculate daily volume?

Growth rates between developed and undeveloped countries : The past 500 years have seen divergence in GDP and growth rates between developed and undeveloped countries.

Result of the increased competition : Suppose the number of firms you compete with recently increased. You estimated that as a result of the increased competition, the demand elasticity

What would be the value of the loan : What would be the value of the loan if the company is paying the bank 4 percent every 6 months instead of 8 percent per year?

Complete a family health assessment : Before interviewing the family, develop three open-ended, family-focused questions for each of the following health patterns.

Laws of capitalist motion : Explain what Marx meant by "the laws of capitalist motion." Have we seen any historical evidence in the US economy that these laws

Calculate the growth rate of real gdp per person : Calculate the growth rate of real GDP per person between 2015 and 2016 and interpret what it means.

Describe the communicable disease : Describe the communicable disease (causes, symptoms, mode of transmission, complications, treatment) and the demographic of interest.

User Account

All Pages