What is EAR implied in each option

Assignment Help Financial Management
Reference no: EM13724266

Suppose you plan to borrow $10000 from the bank and have two options to pay back:

a) $500 monthly payment for 24 months and the first payment due one month from you take the loan.

b) $6050 yearly payment for 2 years and the first payment due one year from you take the loan.

What is EAR implied in each option? Which one do you prefer and explain why?

Reference no: EM13724266


Write a Review


Financial Management Questions & Answers

  What is return on equal weighted index of these three stocks

Assume there are only three stocks in the market: A, B, and C. At time 0, P(A) = $10, P(B) = $20, and P(C) = $10. At time 1, P(A) = $15, P(B) = $30, P(C) = $5. The number of shares outstanding is 1 million for A, 2 million for B, and 2 million for C...

  Assessing the value of customer relationship

assessing the value of customer relationship managementtrevor toy auto mechanics is an automobile repair shop in

  Expected to result in after-tax cash flows

A company has an opportunity to invest in a project that is expected to result in after-tax cash flows of $18,000 the first year, $20,000 the second year, $23,000 the third year, -$8,000 the fourth year, $30,000 the fifth year, $36,000 the sixth year..

  Describe the workings of any home buyer assistance schemes

Identify and describe the key factors that must be taken into consideration when assessing whether a credit facility is ‘not unsuitable' for a borrower.

  What is the current book value of the old machine

A five year old machine cost $15,000 when new and is being depreciated on a a straight line basis to a zero salvage value in 5 more years ( 10 years total life.) the operating expenses for this machine are $2500 as of the end of each year.

  How much should we budget for electricity

Last year we budgeted $8,000 for electricity. We expect to the price per kilowatt hour (kWh) to go up from 6.5 cents per kWh to 7 cents per kWh. We have also recently implemented a program to reduce energy usage and expect our usage to decrease by 20..

  Discuss the comoanys decision to distribute a dividend

Prepare an income statement and aretained earnings statement for the month of june and a balance sheet at june 30, 2014.

  What some of the factors that a finance manager considers

What some of the factors that a finance manager considers in choosing an appropriate discount rate for a capital investment project

  Future revenue stream from ticket sales

The Portland Stallion professional football team is looking at its future revenue stream from ticket sales. Currently a season package costs $275 per seat. The season ticket holders have been promised this same rate for the next five years.

  Read the journal article graeff t r amp harmon s 2002

read the journal article graeff t. r. amp harmon s. 2002 lsquocollecting and using personal data consumers awareness

  Report annual cash flows

Briefly explain why you are using the computational method chosen. (Hint: you will need to decide to use the APV or WACC formula.

  Signed a sales contract with a new customer

Webster Industrial Products just signed a sales contract with a new customer. What is this contract worth as of the end of year 4 if the following payments will be received and the firm earns 5 percent on its savings? Year 1 84,000, year 2 113,000, y..

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