What is the effective annual return

Assignment Help Financial Management
Reference no: EM13879561

Friendly’s Quick Loans, Inc., offers you $6.50 today but you must repay $8.35 when you get your pay check in one week (or else).

Requirement 1: What is the effective annual return Friendly’s earns on this lending business? (Round your answer as directed, but do not use rounded numbers in intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)

Effective annual return % ______________ (round to 2 decimal places)

Requirement 2: If you were brave enough to ask, what APR would Friendly’s say you were paying? (Round answer as directed, but do not use rounded numbers in intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).)

Annual percentage rate % __________ (Round to 2 decimal places)

Reference no: EM13879561

Questions Cloud

Write this problem in standard form : Solve this problem using the simplex method. Write each tableau on additional sheets of paper. Label tableau 1 as 1, tableau 2 as 2, etc. What is the optimal solu- tion for this problem?
Terminal Value plays important role in enterprise valuation : Terminal Value plays an important role in enterprise valuation. What factors affect the estimate of Terminal Value? How sensitive enterprise valuation is to Terminal value?
Upheld the affordable health care act : The Supreme Court of the Unites States recently upheld the Affordable Health Care Act. This act affects many businesses. How can we analyze the Healthcare situation as a valuation problem? If you were a private medical insurance company, how would yo..
Healthcare situation as a valuation problem : The Supreme Court of the Unites States recently upheld the Affordable Health Care Act. This act affects many businesses. How can we analyze the Healthcare situation as a valuation problem? If you were a private medical insurance company, how would yo..
What is the effective annual return : Friendly’s Quick Loans, Inc., offers you $6.50 today but you must repay $8.35 when you get your pay check in one week (or else). What is the effective annual return Friendly’s earns on this lending business?
How does the law distinguish victim and offender : Who are the two (2) ‘partners' in all crimes? How does the law distinguish victim and offender? Why is it necessary to study victims in order to understand offenders?
Solve , report and analyze the optimal solution : Assuming he wishes to maximize profit, given these restrictions, formulate this decision problem as an LP model in general form. Solve it using Solver, and report and analyze the optimal solution
What persuasive advertising appeal does communication apply : Which of Maslows Hierarchy of Needs is the communication leveraging and what persuasive advertising appeal does the communication apply
Construct a thermal circuit of the system : Construct a thermal circuit of the system. Derive an expression for the temperature Td of the heat-generating surface of the device in terms of the circuit thermal resistances, To and T8. Express the thermal resistances in terms of appropriate par..

Reviews

Write a Review

Financial Management Questions & Answers

  How much can you withdraw each year in your retirement

You are planning your retirement in 10 years. You currently have $176,000 in a bond account and $616,000 in a stock account. You plan to add $6,400 per year at the end of each of the next 10 years to your bond account. How much can you withdraw each ..

  Explaining the cash conversion cycle

Write a memo to your supervisor explaining the cash conversion cycle at your company, a manufacturer of plastic toys. Be sure to address the following: Material ordering costs-Labor costs-Credit sales (accounts receivables)

  What is the minimum expected annual return for stock

In order to fund her retirement, Michele requires a portfolio with an expected return of 0.10 per year over the next 30 years. She has decided to invest in Stocks 1, 2, and 3, with 25 percent in Stock 1, 50 percent in Stock 2, and 25 percent in Stock..

  What will be the total entity and personal tax cost

Marsha is ready to start a business that will generate about 150k of earnings each year. Marsha will work full time for the business. Her plan is to withdraw 100k of earnings from the biz each year. What will be the total entity and personal tax cost..

  What must lisas annual deposit be

Lisa Simpson wants to have $1,500,000 in 30 years by making equal annual end of the year deposits into a tax - deferred account paying 11.75 percent annually. What must Lisa's annual deposit be?

  Future value of an annuity

Your client is 35 years old; and she wants to begin saving for retirement, with the first payment to come one year from now. She can save $15,000 per year; and you advise her to invest it in the stock market, which you expect to provide an average re..

  Discuss various strategies to put in place that would reduce

Discuss various strategies to put in place that would reduce disbursement costs and you are the financial manager for a mid-sized company with 10 locations throughout the United States.

  The balance sheet analysis highlights

Describe the major trends or observations that the income statement analysis highlights, and provide an opinion on what this means to the company. Describe the major trends or observations that the balance sheet analysis highlights, and provide an op..

  Declining stock market index due to lower share prices

A declining stock market index due to lower share prices _____.

  Both bonds make semi-annual payments

Filer manufacturing has 9.1 million shares of common stock outstanding. The current share price is $61, and the book value per share is $3. Filer manufacturing also has two bond issues outstanding. The first bond issue has a face value of $71.6 milli..

  The degree of operating leverage

Kendall Company has sales of 1,500 units at $60 a unit. Variable expenses are 30% of the selling price. If total fixed expenses are $53,000, the degree of operating leverage is:

  Find k if her annual effective investment yield

Common stock X pays a dividend of $100 at the end of the first year, with each subsequent annual dividend being $10 more than the preceding one. Alice purchases the stock at a theoretical price to earn an expected annual effective yield of 10%. Immed..

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