Your credit card carries an annual rate of 21.6% APR with a minimum payment due monthly. If you don’t pay the monthly minimum amount for a year, what is its EAR?
Q: compounding periods wrong
A: Compounding Period: It represents the period of time between the last time interest was compounded…
Q: Greta has risk aversion of A = 5 when applied to return on wealth over a one-year horizon. She is…
A: An optimal portfolio is a portfolio of assets that maximizes an investor's expected return for a…
Q: 5)Considering the following: 8 year, semi-annual bond, 0.095 YTM, 997 current price. Par is 1000…
A: Step 1 The interest rate on a bond or fixed-income asset is known as the coupon rate. When the bond…
Q: 2. Thor Industries finances its projects with 40% debts, 10% preferred stock and 50% common stock ●…
A: WACC stands for Weighted Average Cost of Capital. It is a financial metric used to calculate the…
Q: Which of the following would NOT be considered a cash equivalent? OA. Foreign currency B. Money…
A: Step 1 Cash Equivalent Cash equivalents are assets-based short-term investment securities with a…
Q: A $23,970 loan is to be settled by making payments of $6,999 at the end of every six months. The…
A: Here,
Q: Dominique has a mortgage of $445,000 through his bank for property purchased. The loan is repaid by…
A: Any sum borrowed to meet any specific personal or business needs is regarded as a mortgage/loan. The…
Q: A loan of $1,000 is made at an interest rate of 11% compounded quarterly. The loan is to be repaid…
A: A loan is a contract between two parties where an amount is forwarded in exchange for a promise of…
Q: You would like to have $550,000 when you retire in 40 years. How much should you invest each quarter…
A: compound = quarterly = 4 Future value = fv = $550,000 Time = 40 * 4 = 160 quarters Interest rate = r…
Q: Assume a $100,000 interest-only ARM with a 30-year maturity and an initial rate of 6 percent. If at…
A: Loan Amount = $100,000 New interest rate = 8% Compound = monthly = 12
Q: 3. A company has determined that its optimal; capital structure consists of 40%debt and 60% equity.…
A: Data given: Weight of debt=40% Weight of equity=60% Formula to be used for calculation of WACC:…
Q: 12. Suppose that 1-year bonds currently offer a nominal yield to maturity of 4% (1,0 = 0.04),…
A: Yield to maturity (YTM) of various maturities are known. The yield curve has to be plotted. Several…
Q: The cash flows for 4 investments with economic lives of 4,5,5 and 6 years respectively are as…
A: To know which investment is best , we will use one of the main techniques of Capital Budgeting which…
Q: 2. Rita has received a gift of $15 000 from her grandma and she plans to put this in a 6-year term…
A: Data given: PV=$15000 N=6 years Rate=8% compounded monthly Required: Amount after 6 years
Q: What would you recommend, as far as trading, when the short- term (say 5-day) moving average moves…
A: Moving average, A technical indicator that is used by the traders and investor to determine the…
Q: Which of the following offenses can a colleague get REDS listed for? A Dishonesty and divulging…
A: REDS: The REDS is an acronym for Register of Employees Dishonesty System. It is a directory that…
Q: Vigour Pharmaceuticals Ltd. is considering investing in a new production line for its pain-reliever…
A: Initial cost includes the cost of equipment, installation cost and increase in net working capital.…
Q: Find the interest on the following loan. $5324 at 8%; loan made on August 12 and due December 15 The…
A: Number of days from August 12 to December 15 = 19+30+31+30+15 = 125 days
Q: Marla has $25,000 invested in a stock with a beta of 0.75, $15,000 invested in a stock with a beta…
A: The beta of a portfolio is the weighted average beta of all the individual stocks. So we will have…
Q: In cell B7, enter a formula using relative cell references that multiply cell B6 from cell B5.
A: In an abridged version of an excel based model, an excel based formula needs to be identified in the…
Q: Scheduled payments of $732 due one year ago and $1476 due in six years are to be replaced by two…
A: Two scheduled payments are to be replaced by two equal replacement payments. Quantum and timing of…
Q: Suppose that the price of an American call option that expires in 7 months and has a strike price of…
A: An option is a type of financial instrument that is based on the value of underlying securities,…
Q: Trashia has a mortgage of $474,000 through her bank for property purchased. The loan is repaid by…
A: Solution : Loan Amount = $ 474000 Loan Term = 23 Year or 276 month Interest…
Q: Three employees of the Horizon Distributing Company will receive annual pension payments from the…
A: The PV of a payment series is the cumulative value of the cash flows at present assuming they are…
Q: if you place $1100 today into an account that pays simple interest and you have $6100 dollars in the…
A: Present value is the estimation of the current value of future cash value which is likely to be…
Q: The market price of a stock is $48.96 and it just paid $5.06 dividend. The dividend is expected to…
A: We need to use constant growth model to calculate required rate of return. P0 =D0(1+g)rs-g where P0…
Q: Your annual salary 12 years ago was $14,500; it is now $25,000. What is the average annual rate of…
A: Time = t = 12 years Beginning value = bv = $14,500 Ending value = ev = $25,000
Q: Scenario: Imagine you have recently inherited $20,000 and you want to save it. You can put it in a…
A: A decision is a choice between two or more alternatives, where the outcome of the choice is not…
Q: Dimitri operates Downtown Discount Pharmacy, a sole proprietorship. Downtown Discount Pharmacy…
A: Net income = $205,000 Self-employment taxes = $21,263 Salary contribution = 15%
Q: A scholarship fund is to be set up to provide monthly scholarship of $840. If the first payment is…
A: Present value is the estimation of the current value of future cash value which is likely to be…
Q: I need help using the present value of a bond calculator at…
A: Bond: The price of a bond is estimated by discounting the par value and the coupon payments using…
Q: A demand loan for $10,088.75 with interest at 7.1% compounded annually is repaid after 4 years, 8…
A: Individuals and entities often take loans to finance something. A demand loan is that loan which has…
Q: Your firm has a target debt ratio of 30%. Cost of debt (Rb) is 6%. The risk-free rate is 3% and the…
A: Fist we need to calculate cost of equity by using CAPM model. Cost of equity =Risk free rate…
Q: Suppose a 10-year, $1,000 bond with an 8.9% coupon rate and semi-annual coupons is trading for a…
A: Bonds are debt instruments issued by companies. Bonds pay periodic coupons or interests and in this…
Q: Baker Industries’ net income is $26000, its interest expense is $5000, and its tax rate is 45%. Its…
A: ROE (Return on Equity) and ROIC (Return on Invested Capital) are financial ratios used to evaluate…
Q: 4. Refer to the data for Pettijohn Inc. What is the firm's days sales outstanding? Assume a 360-day…
A: Ratio analysis is the study of different financial data points found in the financial reports of an…
Q: (Future value of an annuity) in 7 years, you are planning on retiring and buying a house in Oviedo,…
A: Step 1 The amount you must invest now in order to get income payments in the future is the value of…
Q: One year ago, you purchased a stock at a price of $57.81 per share. Today, you sold your stock at a…
A: The dividends paid by a company refer to the profits that the company disburses to its shareholders…
Q: WRONG AGAIN
A: Interest on credit card is generally calculated by using the average daily balance method.
Q: Joanne repays a loan amount 200,000 with 72 end of month payments. The nominal interest rate is 15%…
A: The Effective Annual Yield: The effecive annual yield is the actual return earned on an investment…
Q: Considering the following bond: 5 year, semi-annual bond, 0.11 coupon, 0.055 YTM. Par is 1000. What…
A: A bond is a debt instrument that raises capital from investors. It is considered one of the most…
Q: Alexandra took out a mortgage of $791,000 for a house and just made the 79th end of month payment.…
A: A mortgage is a borrowing taken such that regular payments are made to repay the loan. The…
Q: Find the accumulated amount A if the principal P is invested at the interest rate of r/year for t…
A: Future Value is that value which depend upon the present value and rate of interest which is earned…
Q: Perform a financial analysis for a project using the format provided in Figure 4-5. Assume that the…
A: ROI: It represents the return made on an investment over a period of time and is expressed in…
Q: Problem 3: Compute the equivalent rate of (A+B+C+D+E) % compounded semi-annually to a rate…
A: Let's assume that the annual interest rate compounded semi-annually is r_sa, and that the sum of the…
Q: Stock A has a beta of 1.62 and an expected return of 19.1 percent. Stock B has a beta of 1.02 and an…
A: The Capital Asset Pricing Model (CAPM) is a financial model that describes the relationship between…
Q: Hans Brinker is assistant vice-president for marketing for Skagen Ice Skate Company (SIS). SIS does…
A: Covered Interest Rate Parity (CIRP) is an economic theory that explains the relationship between the…
Q: A coupon bond that pays interest of 4% annually has a par value of $1,000, matures in 5 years, and…
A: Bonds are debt securities issued by the Government or other companies, who seek to raise money from…
Q: You have taken out a loan of $22,000 for 4 years with an interest rate of 3% compounded annually.…
A: Step 1 Equal periodic loan payments are intended to pay off the debt at the end of a set period of…
Q: Darrel buys a home for $314,945 and he outs 25% down. He finances the remainder at 3% for 15 years.…
A: Purchase value of house = $314,945 Down payment = 25% Compound = monthly = 12 Interest rate = r =…
Your credit card carries an annual rate of 21.6% APR with a minimum payment due monthly. If you don’t pay the monthly minimum amount for a year, what is its EAR?
Step by step
Solved in 2 steps
- If your Visa credit card has an APR of 14.49%, compounded monthly and your current balance is $425.69. a) If you make no payments and no additional purchases for one year, what will bethe amount owed at the end of that year?b) How much total interest will be paid?c) What is the nominal rate?d) What is the effective annual rate (EAR)?e) Suppose this credit card company requires a minimum monthly payment of $15.Assuming that no additional purchases are made and also assuming that this minimum amount is paid every month, prepare an amortization schedule for the first three months of payments.Suppose your Visa credit card charges an APR of 13.5%, compounded monthly and your current statement shows a balance of $758.50.a) If you make no payments and no additional purchases for one year, what will bethe amount owed at the end of that year?b) How much total interest will be paid?c) What is the nominal rate?d) What is the effective annual rate (EAR)?e) Suppose this credit card company requires a minimum monthly payment of $25.Assuming that no additional purchases are made and also assuming that this minimum amount is paid every month, prepare an amortization schedule for the first three months of payments.Use PMT = to determine the regular payment amount, rounded to the nearest dollar. Your credit card has a balance of $5800 and an annual interest - nt rate of 12%. You decide to pay off the balance over two years. If there are no further purchases charged to the card, a. How much must you pay each month? b. How much total interest will you pay? a. The monthly payments are approximately $ (Do not round until the final answer. Then round to the nearest dollar as needed.) b. The total interest paid over 2 years is approximately $. (Round to the nearest dollar as needed.)
- Suppose that on January 1 you have a balance of $3100 on a credit card whose APR is 17%, which you want to pay off in 1 year. Assume that you make no additional charges to the card after January 1 a. Calculate your monthly payments.b. When the card is paid off, how much will you have paid since January 1?c. What percentage of your total payment from part (b) is interest?You have a balance of $400 on your credit card and make no more charges. Assume that the card carries an APR of 18%. Suppose you wish to pay off the card in six months by making equal payments each month. What is your monthly payment?Suppose you owe $1,100 on your credit card. The annual percentage rate (APR) is 18%, compounded monthly. The credit card company says your minimum monthly payment is $19.80. (4.15) Solve, a. If you make only this minimum payment, how long will it take for you to repay the $1,100 balance (assuming no more charges are made)? b. If you make the minimum payment plus $10 extra each month (for a total of $29.80), how long will it take to repay the $1,100 balance? c. Compare the total interest paid in Part (a) with the total interest paid in Part (b).
- Suppose that on January 1 you have a balance of $2600 on a credit card whose APR is 13%, which you want to pay off in 1 year. Assume that you make no additional charges to the card after January 1. a. Calculate your monthly payments. b. When the card is paid off, how much will you have paid since January 1? c. What percentage of your total payment from part (b) is interest? ... a. The monthly payment is $. (Do not round until the final answer. Then round to the nearest cent as needed.) b. The total paid since January 1 is $. (Use the answer from part (a) to find this answer. Round to the nearest cent as needed.) c. The percentage of the total paid that is interest is %. (Use the answer from part (b) to find this answer. Round to one decimal place as needed.)Suppose that on January 1 you have a balance of $3800 on a credit card whose APR is 13%, which you want to pay off in 1 year. Assume that you make no additional charges to the card after January 1. a. Calculate your monthly payments. b. When the card is paid off, how much will you have paid since January 1? c. What percentage of your total payment from part (b) is interest? a. The monthly payment is $ ☐. (Do not round until the final answer. Then round to the nearest cent as needed.)Use PMT= HA to determine the regular payment amount, rounded to the nearest dollar. Your credit card has a balance of $4200 and an annual interest rate of 1% You decide to pay off the balance over three years. If there are no further purchases charged to the card, a. How much must you pay each month? b. How much total interest will you pay? a. The monthly payments are approximately $ (Do not round until the final answer. Then round to the nearest dollar as needed.) b. The total interest paid over 3 years is approximately $ (Round to the nearest dofar as needed.)
- P. Use PMT to determine the regular payment amount, rounded to the nearest dollar. Your credit card has a balance of $4800 and an annual -nt interest rate of 12%. You decide to pay off the balance over three years If there are no further purchases charged to the card, a. How much must you pay each month? b. How much total interest will you pay? ked Scol a. The monthly payments are approximately S (Do not tound until the final answer Then round to the nearest dollar as needed) suon estionSuppose you owe $1,100 on your credit card. The annual percentage rate (APR) is 24%, compounded monthly. The credit card company says your minimum monthly payment is $24.75. a. If you make only this minimum payment, how long will it take for you to repay the $1,100 balance (assuming no more charges are made)? b. If you make the minimum payment plus $7.17 extra each month (for a total of $31.92), how long will it take to repay the $1,100 balance? c. Compare the total interest paid in Part (a) with the total interest paid in Part (b). a. It will take b. It will take months for you to repay the initial balance. (Round to the nearest whole number.) months for you to repay the initial balance. (Round to the nearest whole number.) (Round to the nearest dollar.) c. The difference in the total interest paid in Part (a) and Part (b) is $1. Suppose that on January 1 you have a balance of $5600 on a credit card whose APR is 17%, which you want to pay off in 1 year. Assume that you make no additional charges to the card after January 1. a. Calculate your monthly payments. b. When the card is paid off, how much will you have paid since January 1? c. What percentage of your total payment from part (b) is interest? a. The monthly payment is? Then round to the nearest cent as needed.) 2. Compare the monthly payments and total loan costs for the following pairs of loan options. Assume that both loans are fixed rate and have the same closing costs. You need a $160,000 loan. Option 1: a 30-year loan at an APR of 8%. Option 2: a 15-year loan at an APR of 7.5%. Question content area bottom Part 1 Find the monthly payment for each option. The monthly payment for option 1 is $enter your response here. The monthly payment for option 2 is $enter your response here. (Do not round…