Your firm is considering two one-year loan options for a $506,000 loan. The first carries fees of 2.4% of the loan amount and charges interest of 3.6% of the loan amount. The other carries fees of 1.8% of the loan amount and charges interest of 4.7% of the loan amount. a. What is the net amount of funds from each loan? b. Based on the net amount of funds, what is the true interest rate of each loan?
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- Your firm is considering a one-year loan for $522,000. The fees are 2% of the loan amount and the interest rate is 4.3%. First, compute the net amount of funds from the loan. Based on this net amount, what is the true interest rate of the loan? Group of answer choicesSuppose you want to borrow $90,000 and you find a bank offering a 20-year loan with an APR of 5%. a. Find your regular payments if you pay n = 1, 12, 26, 52 times a year. b. Compute the total payout for each of the loans in part (a). c. Compare the total payouts computed in part (b). a. The payment for n = 1 would be $ The payment for n = 12 would be $ The payment for n = 26 would be $ The payment for n= 52 would be $ (Do not round until the final answer. Then round to the nearest cent as needed.)Your firm is considering a one-year loan for $522,000. The fees are 2% of the loan amount and the interest rate is 4.3%. First, compute the net amount of funds from the loan. Based on this net amount, what is the true interest rate of the loan?
- Suppose your firm is seeking a three-year, amortizing $400,000 loan with annual payments, and your bank is offering you the choice between a loan of $415,000 with a compensating balance of $15,000 and a loan of $400,000 without a compensating balance. The interest rate on the $400,000 loan is 9.5 percent. How low would the interest rate on the loan with the compensating balance have to be for you to choose it? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Interest rate 8.73 %Suppose your firm is seeking a seven - year, amortizing $770,000 loan with annual payments, and your bank is offering you the choice between a loan of $817,000 with a compensating balance of $47,000 and a loan of $770,000 without a compensating balance. The interest rate on the $770,000 loan is 8.0 percent. How low would the interest rate on the loan with the compensating balance have to be for you to choose it?ABC is inclined to take a bank loan that has a face amount of P5,000,000, a term of 6 months, interest of 10%, and required compensating balance of P700,000. Compute for the following: 1. How much is the simple effective annual interest of the loan? 2. Should ABC accept this loan if another loan has similar terms but has a simple effective cost of 11%?
- You are taking out a single-payment loan that uses the simple interest method to compute the finance charge. You need to figure out what your payment will be when the loan comes due. The equation to calculate the finance charge is: FsFs = Amount of Loanx Interest Ratex Term of Loan where FsFs is the finance charge for the loan, and the term of the loan is in . You’re borrowing $10,000 for two years with a stated annual interest rate of 6%.1) What is the loanable funds market? 2) Calculate the following: You save $100 and want to see how much you will earn based on the following interest rates Interest Rate Value after 1 month -1% ? 0.5% ? 1% ? 2% ? 3) What supply factors affect the Loanable Funds market? 4) What demand factors affect the Loanable Funds market?Suppose you want to borrow $90,000 and you find a bank offering a 20-year term for a loan of that amount, with an APR of 7%. Complete parts (a) and (b) below. (a) What are your monthly payments? PMT=$ (Round to the nearest cent as needed.) Question
- Consider a loan repayment plan described by the following initial value problem, where the amount borrowed is B(0) = $40,000, the monthly payments are $600, and B(t) is the unpaid balance of the loan. Use the initial value problem to answer parts a through c. B' (+) =0.03B - 600, B(0) = 40,000 a) Find the solution of the initial value problem and explain why B is an increasing solution. B(t) = Why is B an increasing function? O A. The function is increasing because it is an exponential function with a positive coefficient and a negative exponent. O B. The function is increasing because it is an exponential function with a positive coefficient and a positive exponent. O C. The function is increasing because it is an exponential function with a positive exponent. O D. The function is increasing because it is an exponential function with a positive coefficient. b) What is the most that you can borrow under the terms of this loan without going further into debt each month? The…(b) Suppose that you took out PTPTN loans totalling RM24000 with interest of 1% per year. You have an online payment plan which deducts savings from your bank account at a rate of RM100 per month. (Hint: Assume that the rate is evaluated based on the current balance of the loan.) (1) Write the initial value problem for the situation above. State all variables and the quantities they represent.A borrower is purchasing a property for $200,000 and can choose between two possible loan alternatives. Loan A is a 90% loan for 25 years at 8% interest and 2 points and Loan B is a 95% loan for 25 years at 8.75% interest and 1 point. Assume the loans will be held to maturity, what is the incremental cost of borrowing the extra money? Assume that the loans will be repaid in 5 years. What is the incremental cost of borrowing the extra money? Rework parts (a) and (b) assuming the lender is charging 3 points on Loan A and 2 point on Loan B. What is the incremental cost of borrowing?