#1 Shae likes to work on cars and signs a simple interest note with a maturity value of $ 62000 at 7.7% for 275 days to open an auto repair shop. Find the principal and the interest. (Assume a 360-day year.) ANSWER

#1 Shae likes to work on cars and signs a simple interest note with a maturity value of $ 62000 at 7.7% for 275 days to open an auto repair shop. Find the principal and the interest. (Assume a 360-day year.) ANSWER

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 28P

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

#2 A company borrows $4000 at 15.6% for 60 days. Find the amount of interest due and the maturity value after

60 days. ANSWER

#3 In order to start a small business, a student takes out a simple interest loan for $7000.00 for 6 months at a rate of 12.25 %.

Find the future value of the loan.

The future value is $ ? ANSWER

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