What is the effective annual rate on the loan

Assignment Help Financial Management
Reference no: EM131448443

You’ve borrowed $3,538.87 and agreed to pay back the loan with monthly payments of $180. Assume the interest rate is 12% stated as an APR.

a. How long will it take you to pay back the loan? (Do not round intermediate calculations. Round your answer to the nearest whole number.)

Number of months   

b. What is the effective annual rate on the loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Effective annual rate %

Reference no: EM131448443

Questions Cloud

Primary disadvantage of the corporate form of organization : Firms raise capital by selling newly issued securities in the ___________markets, while existing, already outstanding securities are traded in the ______________markets. The primary disadvantage of the corporate form of organization is. In a dealer m..
Statistical inference focuses on drawing conclusions : Statistical inference focuses on drawing conclusions about populations from samples. Hypothesis testing is the fundamental statistical approach used that allows you to draw valid statistical conclusions about the value of population parameters.
Stocks perform better over long term than market averages : There is evidence that small stocks and value stocks perform better over the long term than the market averages. What are some logical reasons for this phenomenon?
Compute the total amount he must pay : “Bob Pearson borrowed $30,000 from a bank at an interest rate of 9% compounded monthly. The loan will be repaid in 36 equal monthly installments over three years. Immediately after his 25th payment, Bob desires to pay the remainder of the loan in a s..
What is the effective annual rate on the loan : You’ve borrowed $3,538.87 and agreed to pay back the loan with monthly payments of $180. Assume the interest rate is 12% stated as an APR. How long will it take you to pay back the loan? What is the effective annual rate on the loan?
Suppose ford sold an issue of bonds with years maturity : “Suppose Ford sold an issue of bonds with a 15-year maturity, a $1000 per value, a 12% coupon rate, and annual interest payments. Today, the closing price of the bond is $786.20. What is the current yield?
What is the future value of your inheritance at retirement : You believe you will need to have saved $428,000 by the time you retire in 30 years in order to live comfortably. You also believe that you will inherit $103,000 in 5 years. If the interest rate is 6% per year, what is the future value of your inheri..
Company conducts sensitivity analysis using variable cost : CC’s is analyzing a proposed project with anticipated sales of 3,620 units, give or take 5 percent at a sales price of $24, plus or minus 2 percent.. The variable cost per unit is $14.60, plus or minus 4 percent, and the fixed costs are $12,900, plus..
What is the percentage change in the price of these bonds : Laurel, Inc., and Hardy Corp. both have 6 percent coupon bonds outstanding, with semiannual interest payments, and both are priced at par value. The Laurel, Inc., bond has two years to maturity, whereas the Hardy Corp. bond has 15 years to maturity. ..

Reviews

Write a Review

 

Financial Management Questions & Answers

  What is the NPV of the decision to replace the computer now

Suppose we are thinking about replacing an old computer with a new one. The old one cost us $1,340,000; the new one will cost, $1,600,000. The new machine will be depreciated straight-line to zero over its five-year life. The tax rate is 40 percent, ..

  One part of managing short-term cash needs

Estimating ______ is one part of managing short-term cash needs. The second part is estimating _______.

  What interest rate would you be indifferent between two plan

Assume that you just won the state lottery. Your prize can be taken either in the form of $42,000 at the end of each of the next 25 years (i.e., $1.05 million over 25 years) or as a lump sum of $490,000 paid immediately? At approximately what interes..

  An investor earns a profit on a put option when

An investor earns a profit on a put option when

  Responsibility to forecast the sales

Fiat has introduced a new car in the United States called the 500. Assume that your boss has the responsibility to forecast the sales of the 500 in the United States for the year 2012. He believes that Fiat will sell 85,000 of the 500s for 2012. Supp..

  Portfolio of options and stock-construct the profit profile

Given the following portfolio of options and stock, construct the profit profile.

  Describe the importance of international capital structure

Describe the importance of international capital structure. What risks can you identify when working with cash, credit and inventory management? Provide your rationale and any supporting data.

  New degree of operating leverage for output levels

At an output level of 18,500 units, you have calculated that the degree of operating leverage is 2.30. The operating cash flow is $60,000 in this case. Ignore the effect of taxes. What will be the new degree of operating leverage for output levels of..

  Nonrecurring items-indicate appropriate accounting treatment

For each of these nonrecurring items, give an example and indicate (match with) the appropriate accounting treatment.  Extraordinary item. Prior period adjustment. Change in accounting estimate. Shown net as a separate line item between net income an..

  About the loan amortization and ear

You want to buy a car, and a local bank will lend you $30,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 11% with interest paid monthly. What will be the monthly loan payment?  What will be the l..

  Preferred stocks beta with respect to the market

Which of the following items is least appropriate to purchase with a credit card unless you will pay the bill in full when the statement is received? Suppose that you own IBM preferred stock that pays an annual, fixed, and perpetual dividend of $10 w..

  Regarding the tax consequences of selling the fountain

Hazel owns an event planning company that specializes in very high-end events. Several years ago, Hazel purchased a magnificent chocolate fountain for $3,000 and has since taken $1,200 in depreciation deductions on the fountain. Which of the followin..

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