What is the effective annual rate on a six-month loan

Reference no: EM13289437

Bank A offers loans with a 10 percent stated annual rate and a 10 percent compensating balance. You wish to obtain $250,000 in a six month loan.

a. How much must you borrow to obtain $250,000 in usable funds? Assume you currently do not have any funds on deposit at the bank. What is the effective annual rate on a six month loan?
b. How much must you borrow to obtain $250,000 in usable funds if you currently have $10,000 on deposit at the bank? What is the effective annual rate on a six-month loan?
c. How much you borrow to obtain $250,000 in usable funds if you currently have $30,000 on deposit at the bank?
d. What is the effective annual rate on a six-month loan?

Reference no: EM13289437

Questions Cloud

What are the forecasted collections on accounts receivable : March, $100. 50% of sales are usually paid for in the month that they take place, 30% in the following month, and the final 20% in the next month. Receivables at the end of December were $100 million. What are the forecasted collections on account..

What is the project apv : A project costs $15 million and is expected to produce cash flows of $3 million a year for 10 years. The opportunity cost of capital is 14%. If the firm has to issue stock to undertake the project and issue costs are $500,000, what is the project'..

Obtain the frequency of oscillation : The time required for one complete cycle of a mass oscillating at the end of a spring is 0.25s. what is the frequency of oscillation

Analyze the functions and responsibilities of the food : Analyze the functions and responsibilities of the food and beverage director to determine which presents the greatest challenge(s), and make recommendations for how those challenges can be addresses. Provide specific examples to support your response..

What is the effective annual rate on a six-month loan : Bank A offers loans with a 10 percent stated annual rate and a 10 percent compensating balance. You wish to obtain $250,000 in a six month loan.

Resources doing a traditional job analysis : Some jobs change so rapidly that companies do not feel doing a job analysis is worthwhile because by the time one is done its already outdated. What advice would you give to such a company to help them take advantage of the benefits a job analysis ha..

Compute the electric field strength between the plates : A doubly charged ion is accelerated to an energy of 30.0 keV by the electric field between two parallel conducting plates separated by 1.50 cm

Determine what will be the output at the maximum load : If it is instrumented with four active strain gages on awheatstone bridge, two axial and two transverse as shown, with S,i.e. strain gage factor of 2.1, initial resistance of strain gagesR = 350 Ω, and the power supply is 10V, what will be theoutp..

What is the total amount of fees to be paid in a year : Beckheart is seeking financing for its inventory. Safe-proof Warehouses offers space in their facility for Beckheart's inventory. They offer loans with a 15 percent APR equal to 60 percent of the inventory.

User Account

All Pages