Nominal rate-Interest on outstanding balances paid monthly

Assignment Help Financial Management
Reference no: EM13850635

As a jewelry store manager, you want to offer credit sales to your customers, with interest on outstanding balances paid monthly. However, to finance your working capital, you must borrow funds from your bank at a nominal 6%, monthly compounding. For this service, you want to charge your customers an effective annual rate (EAR) that is 2% more than the bank is charging you. What nominal rate (APR) will you charge your customers? Use Excel.

Reference no: EM13850635

Questions Cloud

Research efficient market hypothesis-theory of reflexivity : Research Efficient Market Hypothesis and the Theory of Reflexivity; formulate your own thoughts as to which one you believe is the true nature of markets. Take in consideration all the bubbles in the stock & housing markets you have seen.
How international economics impacts my life : How International Economics Impacts My Life- Professionally and Personally." You will need to use a minimum of 10 academic journal articles published
Interest in total does he pay on his credit card debt : Simon recently received a credit card with an 18% nominal interest rate. With the card, he purchased an iPad for $350. The minimum payment on the card is only $10 per month. How much interest in total does he pay on his credit card debt?
Which country is improving the most economically average : Using the table above, which country is improving the most economically for the average citizen of that country
Nominal rate-Interest on outstanding balances paid monthly : As a jewelry store manager, you want to offer credit sales to your customers, with interest on outstanding balances paid monthly. However, to finance your working capital, you must borrow funds from your bank at a nominal 6%, monthly compounding.
How much interest will you earn over the life of the loan : You are lending your friend $25,000. She agrees to repay the loan in equal quarterly payments over a three-year period at an interest rate of 8% compounded quarterly. How much interest will you earn over the life of the loan?
The fraction of your wealth put into stocks : Suppose “s” (the fraction of your wealth put into stocks) is 0.8 and that stocks have a return of 25 percent. If the return on bonds is 3 percent, what is the return on your wealth?
About the risk averse : If you are risk averse, you should choose an asset allocation that is:
Company''s internet presence improve information problems : How might a company's internet presence improve information problems. Can a company's internet presence worsen information problems. Give an example of a company that has an internet presence. Does the company's presence on the internet improve ..

Reviews

Write a Review

Financial Management Questions & Answers

  Discount rate should you use to evaluate warehouse project

As a consultant to GBH skiwear, you have been ask to compute the appropriate discount rate to use in the evaluation of the purchase of a new warehouse facility. What discount rate should you use to evaluate the warehouse project?

  Present value of her royalty income if opportunity cost

Mary will receive $12,000 per year for the next 10 years as royalty for her work on a finance book. What is the present value of her royalty income if the opportunity cost is 12 percent?

  Firms total operating costs-depreciation and amortization

Previous info: Total asset turnover is 4.1x and net annual sales are $42.90 million. If the firm has $6 million of total debt, its debt ratio is %50. Stockbridge pays 10% annual interest on its outstanding debt. If the firm's total operating costs (i..

  Investment policy and present value

The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $33,000 per year forever. If the required return on this investment is 5.8 percent, how much will you pay for the policy?

  What measure of dispersion to measure risk exposure

How we measure risk is related to our perspective. The president of the company would look at the correlation between projects which is measured by the correlation coefficient. The shareholder would measure risk by looking at Beta. While the project ..

  Equipment to actually produce widgets-submit a bid to supply

You are required to submit a bid to supply 200,000,000 widgets per year to the State of Illinois for the next five years. Your company has an idle tract of real estate that cost $1,500,000 ten years ago; if your company sold the land today, it would ..

  Individual rehabilitation services (irs)

Individual Rehabilitation Services (IRS), Determine the minimum federal income tax liability and the taxes owed at the time of filing based on the following data:

  What is this projects incremental after-tax free cash flow

Amsted, Inc. is considering a project that will increase revenues by $2.5 million, cash operating expenses by $700,000, and depreciation and amortization by $300,000 during 2011. For this project, the firm will purchase $800,000 of equipment during t..

  Find the future values of an annuity

Find the future values of the following ordinary annuities: FV of $800 paid each 6 months for 5 years at a nominal rate of 6% compounded semiannually.

  Explain how the ebit chart works inputs determining the

explain how the ebit chart works inputs determining the outputs-the two lines on the chartand the indifference point in

  Calculate growth rate in dividends-expected dividend yield

You buy a share of The Ludwig Corporation stock for $21.20. You expect it to pay dividends of $1.00, $1.15, and $1.3225 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $28.83 at the end of 3 years. Calculate the growth rat..

  What is the yield to call for these bonds

Atlantis Fisheries issues zero coupon bonds on the market at a price of $514 per bond. Each bond has a face value of $1,000 payable at maturity in 14 years. It is callable in 7 years at a call price of $640. Using semi annual compounding, what is the..

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