Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A local finance company quotes an interest rate of 17 percent on one-year loans. So, if you borrow $28,000, the interest for the year will

A local finance company quotes an interest rate of 17 percent on one-year loans. So, if you borrow $28,000, the interest for the year will be $4,760. Because you must repay a total of $32,760 in one year, the finance company requires you to pay $32,760 / 12, or $2,730.00, per month over the next 12 months.

What interest rate would legally have to be quoted? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

What is the effective annual rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance And Control For Construction

Authors: Chris March

1st Edition

0415371155, 978-0415371155

More Books

Students also viewed these Finance questions

Question

What is anti-synergy, and what can be done to counteract it?

Answered: 1 week ago