Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Compost Wholesalers presently uses a public warehouse agreement to finance most of its inventory. The average amount of inventory is $ 3 , 0 0

Compost Wholesalers presently uses a public warehouse agreement to finance most of its inventory. The average amount of inventory is $3,000,000, the bank lends Compost's 70 percent of the value of the inventory for five weeks, and the public warehouse fee is $2,500 per week. Total transportation cost for the loan period is 1.5 percent of the average value of the inventory [that is,(0.015)($3,000,000)], the bank will loan at 6% annum rate.
A. Find the loan amount
B. Find the interest
C. Find other costs/fees
D. Find m and period rate
E. Find the annual percentage rate (APR)
F. Find the effective annual cost (EAR)

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

Step: 3

blur-text-image

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

ISE Financial Markets And Institutions

Authors: Anthony Saunders, Marcia Cornett, Otgo Erhemjamts

8th International Edition

1265561435, 9781265561437

More Books

Students also viewed these Finance questions