(b) Calculate the effective interest rate paid by Vri.com and Xadine in the following swap. Vri.com: Borrower rated AA that can borrow for three years at either 5% fixed or LIBOR plus 50 basis points. Borrower rate BBB that can borrow for three years at either 8% fixed or LIBOR plus 150 basis points. Yadine: 5%+1% Vri.com Yadine LIBOR +50 5% fixed LIBOR +

(b) Calculate the effective interest rate paid by Vri.com and Xadine in the following swap. Vri.com: Borrower rated AA that can borrow for three years at either 5% fixed or LIBOR plus 50 basis points. Borrower rate BBB that can borrow for three years at either 8% fixed or LIBOR plus 150 basis points. Yadine: 5%+1% Vri.com Yadine LIBOR +50 5% fixed LIBOR +

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 7FPE: Calculating interest and APR of installment loan. Assuming that interest is the only finance charge,...

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The following three one-year "discount" loans are available to you: Loan A: $135.538 at a 5.0 percent discount rate Loan B: $125,538 at a 4.0 percent discount rate Loan C: $145,538 at a 4.5 percent discount rate (a) Determine the dollar amount of interest you would pay on each loan and indicate the amount of net proceeds each loan would provide. (Round answers to O decimal place, eg. 5275.) Interest Net Proceeds Loan A %24 24 Loan B %24 Loan C
Find the payment necessary to amortize a 5.5% loan of $7700 compounded semiannually, with 6 semiannual payments. Find (a) the payment necessary to amortize the loan and (b) the total payments and the total amount of interest paid based on the calculated semiannual payments. Then create an amortization table to find (C) the total payments and total amount of interest paid based upon the amortization table. a. The semiannual payment needed to amortize this loan is $ (Round to the nearest cent as needed.) b. The total amount of the payments is $ (Round to the nearest cent as needed.) The total amount of interest paid is $ (Round to the nearest cent as needed.) c. The total payment for this loan from the amortization table is $ %24 The total interest from the amortization table is $
A loan is to be amortized by n level annual payments of X where n > 5. You are given (1) The amount of interest in the first payment is 604.00 (2) The amount of interest in the third payment is 593.75 (3) The amount of interest in the fifth payment is 582.45 Calculate X.
In a discount interest loan, you pay the interest payment up front. For example, if a 1-year loan is stated as $42,000 and the interest rate is 8.50%, the borrower “pays” 0.0850 × $42,000 = $3,570 immediately, thereby receiving net funds of $38,430 and repaying $42,000 in a year. a. What is the effective interest rate on this loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. What is the effective annual rate on a 1-year loan with an interest rate quoted on a discount basis of 18.50%? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Calculating interest and APR of installment loan. Assuming that interest is the only finance charge, how much interest would be paid on a 5,000 installment loan to be repaid in 36 monthly installments of 166.10? What is the APR on this loan?
4) I have an NOI of$172,400. The lender indicated that I can borrow funds at a 7.0% interest rate with a 25 year amortization and 5 year term at a 1.20 Debt Service Ratio(DCR). The lender will charge 2 points. a. What is the monthly payment? b.What is the APR (annual percentage rate) if fully amortized? C.What is the APR at the end of the loan term? d.What if I pay the loan off at the end of the second year, what is my APR? e.What if there was a prepayment penalty of 1.5% at the end of year 4, what is myAPR?
The principal P is borrowed and the loan's future value A at time t is given. Determine the loan's simple interest rate r. P = $4600.00, A = $4795.50, t = 6 months % (Round to the nearest tenth of a percent as needed.)
A mortgage borrower has an outstanding debt at interest rate of J12= 13,08% and 1.034 TL monthly payments for 69 months remaining today. Another bank is offering the same monthly payments but for 63 months only at a lower interest rate. For the refinancing, borrower has to pay 1.800 TL expense today. Decide if the borrower should refinance the debt or not by showing the difference of discounted values of two alternatives.
Consider two loans with a 1-year maturity and identical face values: a(n) 8.3% loan with a 0.99% loan origination fee and a(n) 8.3% loan with a 4.9% (no-interest) compensating balance requirement. Which loan would have the higher effective annual rate (EAR)? Why? The EAR in the first case is %. (Round to one decimal place.)
(a) Determine the effective rate of interest for 4.275% compounded semiannually. Round your final answer to 3 decimal places. (b) Determine the effective rate of interest for 4.25% compounded continuously. Round your final answer to 3 decimal places. (c) If offered a loan at 4.275% compounded semiannually and a loan at 4.25% compounded continuously, which loan would you take? You must use your responses from parts (a) and (b) to explain your reasoning.
This questi Consider a loan of $7700 at 6.8% compounded semiannually, with 18 semiannual payments. Find the following. (a) the payment necessary to amortize the loan (b) the total payments and the total amount of interest paid based on the calculated semiannual payments (c) the total payments and total amount of interest paid based upon an amortization table. (a) The semiannual payment needed to amortize this loan is $ 545.94. (Round to the nearest cent as needed.) (b) The total amount of the payments is $ 9827.07 (Round to the nearest cent as needed.) The total amount of interest paid is $ 2127.07 (Round to the nearest cent as needed.) (c) The total payment for this loan from the amortization table is $ (Round to the nearest cent as needed.) The total interest from the amortization table is $ (Round to the nearest cent as needed.)
A mortgage borrower has an outstanding debt at interest rate of J12= 9,08% and 1.158 TL monthly payments for 70 months remaining today. Another bank is offering the same monthly payments but for 64 months only at a lower interest rate. For the refinancing, borrower has to pay 1.900 TL expense today. Decide if the borrower should refinance the debt or not by showing the difference of discounted values of two alternatives. (hint: you must use the same interest rate for discounting two options to be able to compare)