Old MathJax webview

The financial managers at Montross Corporation are arranging the financing for working capital requirements for the upcoming year. Montross's local bank offers a discount interest loan at a quoted (simple) interest rate of 20.00%. With a discount interest loan, interest is payable up front, and the actual amount received is less than the face amount of the loan. Suppose Montross applies for a $500,000 loan with a nine-month term. Calculate the interest payment, the amount of cash received, the annual percentage rate (APR), and the effective annual rate (EAR) of this loan. Value 7 Interest payment Amount of cash received Annual percentage rate (APR) Effective annual rate (EAR) What is the nine-month rate if the bank charges a $100 processing fee? 23.53% 15.90% 15.02% O 17.67% 9. Computing the cost of a discount interest loan The financial managers at Montross Corporation are arran bank offers a discount interest loan at a quoted (simple) ir actual amount received is less than the face amount of the Calculate the interest payment, the amount of cash receive Value Interest payment Amount of cash received $85,000 Annual percentage rate (APR) Effective annual rate (EAR) $100,000 What is the nine-month rate if the $63,750 a $100 proc $75,000 23.53% 9. Compu The financial managers at Montross Corporation are bank offers a discount interest loan at a quoted (sim actual amount received is less than the face amount Calculate the interest payment, the amount of cash r Value Interest payment - Amount of cash received Annual percentage rate (APR) Effective annual rate (EAR) $400,000 $425,000 What is the nine-month rate if the ! $425,000 as: 23.53 3500.000 O 15.90% 0 The financial managers at Montross Corporation are arr bank offers a discount interest loan at a quoted (simple actual amount received is less than the face amount of Calculate the interest payment, the amount of cash reca Value Interest payment Amount of cash received Annual percentage rate (APR) Effective annual rate (EAR) 15.000 What is the nine-month rate if the b 13.245 sa 3:00 0 23.539. 15,90% 23.53%