Calculate the effective rate of interest on the loan

Assignment Help Financial Management
Reference no: EM131085827

You Plan to borrow $50,000 from the bank to pay for inventory for a gift shop you just opened. The bank offers to lend you the money at 8% annual interest. The funds will be needed for 6 months. Calculate the effective rate of interest on the loan.

Reference no: EM131085827

Questions Cloud

Quantity supplied and the price of the good : What is the entire relationship between the quantity supplied and the price of the good?
Consumers plan to buy during a particular time : Define what is the amount that consumers plan to buy during a particular time or period, at a particular price?
What is the effective cost of the commercial paper issue : A company plans a commercial paper issue of $15 million. The company will have to pay fees totaling $150,000 up front to bring the issue to market. The issue will carry a 270-day maturity and will require interest based on an annual rate of 12%. What..
Source of increased unemployment : Based on the news clip, what might be the main source of increased unemployment? Based on the news clip, what might be the main type of increased unemployment?
Calculate the effective rate of interest on the loan : You Plan to borrow $50,000 from the bank to pay for inventory for a gift shop you just opened. The bank offers to lend you the money at 8% annual interest. The funds will be needed for 6 months. Calculate the effective rate of interest on the loan.
Relationship between the quantity supplied of a good : Define the shows of the relationship between the quantity supplied of a good and its price when all other things remain the same.
Game and illustrate the payoffs : List all the possible pure strategies for each player in this game and illustrate the payoffs from each pair of strategies in a matrix. [Note: each player's strategy should prescribe an action for each of his/her information node (set), regardless..
What is the cost of new stock with market price : What is the cost of new stock with a market price of $28, with last year’s dividends at $1.30, expecting to grow at an annual rate of 7% forever and float costs of 6% of market price?
Current growth rate of real gdp : South Africa's real GDP was 1,900 billion rand in 2011 and 1,970 billion rand in 2012. South Africa's population was 50.5 million in 2011 and 51.0 million in 2012. Calculate

Reviews

Write a Review

Financial Management Questions & Answers

  Uses the periodic inventory system

Checkers uses the periodic inventory system. For the current month, the beginning inventory consisted of 4,800 units that cost $12 each. During the month, the company made two purchases: 2,000 units at $13 each and 8,000 units at $13.50 each. Checker..

  What is the present value of this lottery prize

You just won a very special kind of lottery. Instead of receiving a large lump sum now, for tax reasons this lottery makes equal yearly payments of $ 5,760 for the rest of your life! The only catch is that you have to wait 2 years for the first payme..

  Treasury note with annual coupon rate

Consider a 2-year Treasury note with annual coupon rate 4% and the coupons are paid semiannually. The continuously compounded bond yield is 2% per year. What is the bond price?

  Consider the point and counter-point arguments

Consider the following point and counter-point arguments. Which argument to you support? Explain why and offer your own opinion on the issue.  Country risk does not matter for U.S. projects. U.S.-based MNCs should consider country risk for foreign pr..

  Proportion of each payment that goes to repaying the loan

Consider a 30-year, fixed-rate mortgage. Which of the following decreases over time? 1. The balance due on the loan. 2. The monthly payment. 3. The proportion of each payment that goes to repaying the loan.

  Maximum an investor should pay for the common stock of firm

What would be the maximum an investor should pay for the common stock of a firm that has a 2.5% annual growth rate and has just paid a dividend of $1.50 per year? The next dividend will be paid in exactly 1 year. The required rate of return is 12.5%...

  Value lodges owns an economy motel chain

Value Lodges owns an economy motel chain and is considering building a new 200-unit motel. The cost to build the motel is estimated at $8,040,000; Value Lodges estimates furnishing for the motel will cost an additional $720,000 and will require repla..

  A project has an initial cost of 40000 expected net cash

a project has an initial cost of 40000 expected net cash inflows of 9000 per year for 7 years and a cost of capital of

  Potential projects by thinking of our variable costs

In my company I could apply this to our potential projects by thinking of our variable costs as the hours charged by consultants to the projects they are working on, each additional billable hour that is produced will add incrementally to our cost so..

  What is the yield on one year t-bonds

Quantitative Problem: Today, interest rates on 1-year T-bonds yield 1.7%, interest rates on 2-year T-bonds yield 2.15%, and interest rates on 3-year T-bonds yield 3.5%. If the pure expectations theory is correct, what is the yield on 1-year T-bonds o..

  What are the portfolio weights for a portfolio

What are the portfolio weights for a portfolio that has 200 shares of Stock A that sell for $97 per share and 175 shares of Stock B that sell for $134 per share?

  Forecast the overall expected return and standard deviation

The end-of-year stock prices for KFD Corporation for the past six years, and annual dividends per share, are as follows: Calculate the annual returns on KFD Corporation’s stock for the years 2005– 2009. Determine the geometric and arithmetic means fo..

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