Question
Paymaster Enterprises has arranged to finance its seasonalworking-capital needs with ashort-term bank loan. The loan will carry a rate of 13 percent per annum with
Paymaster Enterprises has arranged to finance its seasonalworking-capital needs with ashort-term bank loan. The loan will carry a rate of 13 percent per annum with interest paid in advance(discounted). Inaddition, Paymaster must maintain a minimum demand deposit with the bank of 7 percent of the loan balance throughout the term of the loan. If Paymaster plans to borrow $8,000 for a period of 6 months, what is the annualized cost of the bankloan?
Paymaster Enterprises has arranged to finance its seasonalworking-capital needs with ashort-term bank loan. The loan will carry a rate of 12 percent per annum with interest paid in advance(discounted). Inaddition, Paymaster must maintain a minimum demand deposit with the bank of 10 percent of the loan balance throughout the term of the loan. If paymaster plans to borrow $100,000 for a period of 3 months, what is the annualized cost of the bankloan?
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Investments An Introduction
Authors: Herbert B Mayo
9th Edition
324561385, 978-0324561388
