+1-415-670-9189
info@expertsmind.com
What rate would legally have to quoted-effective annual rate
Course:- Financial Management
Reference No.:- EM13891873




Assignment Help
Assignment Help >> Financial Management

A local finance company quotes an interest rate of 18.7 percent on one-year loans. So, if you borrow $42,000, the interest for the year will be $7,854. Because you must repay a total of $49,854 in one year, the finance company requires you to pay $49,854/12, or $4,154.50 per month over the next 12 months.

What rate would legally have to be quoted? (Round your answer as directed, but do not use rounded numbers in intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)

What is the effective annual rate? (Round your answer as directed, but do not use rounded numbers in intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
Kose, Inc., has a target debt–equity ratio of 1.25. Its WACC is 8.5 percent, and the tax rate is 38 percent. a. If Kose’s cost of equity is 12 percent, what is its pretax cost
A $1,000 par value bond is currently selling in the marketplace. It had an original maturity of 25 years and was sold 12 years ago. Its coupon rate is 8% and you are to determ
Murray Motor Company wants you to calculate its cost of common stock. During the next 12 months, the company expects to pay dividends (D1) of $2.50 per share, and the current
E-Eyes.com just issued some new preferred stock. The issue will pay an annual dividend of $26 in perpetuity, beginning 15 years from now. If the market requires a return of 4
You would like to purchase a boat that costs $27,325. You have $2,500 for a down payment and the rest of the boat will be financed with a 48 month car loan. The APR on the loa
The law firm of Bushmaster, Cobra and Asp is considering investing in a complete small business computer system. The initial investment will be $50,000. The computer is in the
To value an ordinarily risky project, that is, a project with a beta in the vicinity of about 1, what is the relative contribution of your personal uncertainty (lack of know
Burton Corp. is growing quickly. Dividends are expected to grow at a rate of 29 percent for the next three years, with the growth rate falling off to a constant 6.8 percent th