How much interest will you pay
Course:- Finance Basics
Reference No.:- EM13298417

Assignment Help >> Finance Basics

You've worked out a line of credit arrangement that allows you to borrow up to $ 50 million at any time. The interest rate is .72 percent per month. In addition, 4 percent of the amount that you borrow must be deposited in a non-interest-bearing- account. Assume that your bank uses compound interest on its line of credit loans.

(a) what is the effective annual interest rate on this lending arrangement?

(b) suppose you need $ 15 million today and you repay it in six months. How much interest will you pay?


Put your comment

Ask Question & Get Answers from Experts
Browse some more (Finance Basics) Materials
Explain why there is a difference between the book value of Manpower and the amount you are willing to pay for it. What assumptions and/or principles of financial accounting
If r0 = 0:02, what are the market portfolio return and variance? What are the corresponding weights (i.e. how much to invest in asset 1, asset 2, and the risk-free asset to
Make a 700-1,050-word paper in which you discuss how annuities affect TVM problems and investment outcomes. In your paper, be sure to address the impact of the following ite
FIN359 Derivative Securities Assignment. Analyse the factors that affect the price of an American call option. Differentiate between the different actions that you can take w
Assume you borrowed $12,000 at the rate of 9% and must repay it in four equal installments at the end of each of the next four years. By how much would you reduce the amount
From last three years, the common stock of Makkeny Corporation sold for $63.29 on the NYSE. Today, the current share price for the firm is $38.61. The company paid no dividend
Foreign Currency translation disclosures in the computer industry Many companies make annual reports available on their corporate home page. Annual reports also be accessed t
They calculated a normal completion time of 53 days and a cost of £29,300 - or a crashed completion time of 40 days and a cost of £33,350. See how they got these results, an