How much could be saved in interest charges

Assignment Help Financial Management
Reference no: EM131014799

One thousand dollars is borrowed for one year at an interest rate of 1% per month. If the same sum of money could be borrowed for the same period at an interest rate of 12% per year, how much could be saved in interest charges?

Reference no: EM131014799

Questions Cloud

Random variable having weibull distribution : Suppose that the time to failure (in minutes) of certain electronic component subjected to continuous vibrations may be looked upon as a random variable having Weibull Distribution with a=1/5 andb=1/3.
What is the stocks current value : The Felix Corp. will pay an annual dividend of $1.00 next year. The dividend will increase by 12 percent a year for the following two years before growing at 4 percent indefinitely thereafter. If the required rate of return is 10 percent, what is the..
Annual inflation rate is expected : You would like to have $30000 (in real $) in an account 50 years from now. If the annual inflation rate is expected to be 2.4%, and you expect a nominal annual return of 7% on the account, how much would you need to put in today?
How much should you contribute each month to reach your goal : After graduating from IU, you are hired by a company that offers a 401(k) retirement plan. You would like to save enough in this plan so that when you retire in 35 years you have an account balance of $1 million. You plan to make monthly contribution..
How much could be saved in interest charges : One thousand dollars is borrowed for one year at an interest rate of 1% per month. If the same sum of money could be borrowed for the same period at an interest rate of 12% per year, how much could be saved in interest charges?
What influence would negative interest rates : What influence would negative interest rates have on bank depositors? Is there a Christian Worldview for such a monetary policy whereby depositors are paid a minuscule savings rate, or even charged a fee on their saving account?
Major forest products company in the united states : Georgia-Pacific is a major forest products company in the United States. In addition to timberlands, the company owns and operates numerous manufacturing plants that make lumber and paper products.
Compute the total amount he must pay : Clay Harden borrowed $36000 from a bank at an interest rate of 10% compounded monthly. The loan will be repaid in 48 equal monthly installments over four years. Immediately after this 18th payment, Clay desires to pay the remainder of the loan in a s..
What is its level of inventory : Soaring Eagles Corp. has total current assets of $11,870,000, current liabilities of $5,414,000 and a quick ratio of 0.87. What is its level of inventory?

Reviews

Write a Review

Financial Management Questions & Answers

  Fully depreciated by the straight-line method

Flatte Restaurant is considering the purchase of a $9,100 soufflé maker. The soufflé maker has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce 1,550 soufflés per year, with each costi..

  Discuss whether juan can set aside this contract

Juan is an elderly man who lives with his nephew, Samuel. Juan is totally dependent on Samuel's support. Samuel tells Juan that unless he transfers a tract of land he own to Samuel for a price 35 percent below its market value, Samuel will no longer ..

  What is the yield on day risk-free securities

Assume that interest rate parity holds. In the spot market 1 Japanese yen = $0.01, while in the 180-day forward market 1 Japanese yen = $0.0108. 180-day risk-free securities yield 1.1% in Japan. What is the yield on 180-day risk-free securities in th..

  Netscrape communications does not currently pay dividend

Netscrape Communications does not currently pay a dividend. You expect the company to begin paying a $2.6 per share dividend in 15 years, and you expect dividends to grow perpetually at 3.6 percent per year thereafter. If the discount rate is 13 perc..

  What is the tax shield and cash flows

You must evaluate a proposal to buy a machine. The cost of the machine including shipping, modification and installation costs is 100,000. The machine will be depreciated using MACRS 3 year class life 33%, 45%,,15%7%) sold after 3 years for 12,000. T..

  Considering purchasing a new wood saw that costs

Rocky Mountain Lumber, Inc., is considering purchasing a new wood saw that costs $50,000. The saw will generate revenues of $100,000 per year for five years. The cost of materials and labor needed to generate these revenues will total $60,000 per yea..

  Cost plus and fixed price contracts to compute final price

The correct terms used in cost plus and fixed price contracts to compute final price are:

  Theory of cognitive development from a cultural

What remaining questions or hypotheses do you have about the topic you selected (attachment or cognitive development)?

  Labor savings and depreciation tax savings

Although the Chen Company's milling machine is old, it is still in relatively good working order and would last for another 10 years. It is inefficient compared to modern standards, though, and so the company is considering replacing it. The new mill..

  Private good is publicly provided at a zero price

If a private good is publicly provided at a zero price, it A. Becomes a public good because everyone can consume as much as desired and no one is excluded. B. Will be over consumed as marginal benefits are driven to zero. C. Will be under-consumed be..

  The cost of debt and equity

Calculate a firm's WACC given that the total value of the firm is $2,000,000, $600,000 of which is debt, the cost of debt and equity is 10% and 15% respectively, and the firm pays no taxes.

  What would cause an increase in net working capital

Suppose you are a finance student interviewing for a job and the interviewers ask you what would cause an increase in net working capital. Which of the following would be the best response?

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