please check answers for correctness thank you 162 What is the APR and on the non free credit associated with credit terms of (a)2 15, net 45 16 32 2 98 x 360 45 16326 (b)3 5 net 45 24 74 3 97 x 360 45 2474 167 Pennsylvania Air Transportation (PAT) borrowed $80,000 for 60 days from its bank The stated interest rate on the loan is 12 percent Calculate the APR and assuming the loan is a simple interest loan with a) 25 percent compensating balance requirement, and CAT currently holds no funds at the lending bank (a)APR cost of loan useable proceeds 360 of days Need Interest ($80,000 12) 60 360 $9,600 1666666 $1,599 99 $1,600 APR $1,600 $80,000 360 60 02 6 12 or 12 no compensating balance requirement and EAR (1 daily rate) 360 of days 1 (1 0266667 ) 6 1 12616 or 12 62 (b) APR Cost of loan useable proceeds 360 of days Need interest (80,000 12) 60 360 $9,600 16666666 1599 99 $1,600 Useable proceeds $80,000 25 (compensating balance) $20,000 $80,000 $20,000 $60,000 1600 $60,000 360 60 0266666 6 15999 16 or 16 EAR (1 daily rate) 360 of days 1 (1 0266667) 6 1 17105 or 17 11 1611 Carefree Leisure has a 40 day discount interest loan outstanding The principal amount of the loan is $60,000, its quoted interest rate is 12 percent, and there is no compensating balance requirement Compute the loans APR and EAR APR loan cost useable funds 360 of days Need interest 60,000 x 12 360 40 7200 111111 $800 Discount loan 60,0000 800 $59,200 APR loan cost useable $800 $59,200 360 40 0135135 9 1216215 12 16 EAR (1 0135135) 9 1 12840 or 12 84 1618 Refer to the information provided in Problem 1617 Suppose PDQ needs $90,000 today to pay past due bills How much must PDQ borrow for each loan so that it has $90,000 available to pay the bills How much of the total amount borrowed PDQ will be able to use Loan A) $90,000 x 12 $10,800 $90,000 10,800 $100,800 Loan B) $90,000 x 13 33 $11,997 00 $90,000 $11,997 $101,997 1617 PDQ Enterprise can borrow from its bank using a one year (a) APR 12 EAR 12 simple interest loan with a 12 percent quoted rate and no compensating balance or (b)APR 10 0 x 360 13 33 100 10 15 360 EAR (1 13333) 1 1 13 33 discount interest loan with a quoted rate equal to 10 percent that requires a 15 percent compensating balance What is the EAR of the lower cost loan PDQ normally tries to keep its checking account balance close to $0 16 2 What is the APR and on the non free credit associated with credit terms of (a)2 15, net 45 16 32 2 98 x 360 45 16326 (b)3 5 net 45 24 74 3 97 x 360 45 2474 16 7 Pennsylvania Air Transportation (PAT) borrowed $80,000 for 60 days from its bank The stated interest rate on the loan is 12 percent Calculate the APR and assuming the loan is a simple interest loan with o a) 25 percent compensating balance requirement, and CAT currently holds no funds at the lending bank o (a)APR cost of loan useable proceeds 360 of days o Need Interest ($80,000 12) 60 360 $9,600 1666666 $1,599 99 $1,600 o APR $1,600 $80,000 360 60 02 6 12 or 12 o o no compensating balance requirement and o o EAR (1 daily rate) 360 of days 1 (1 0266667)6 1 12616 or 12 62 o o (b) APR Cost of loan useable proceeds 360 of days o o o Need interest (80,000 12) 60 360 $9,600 16666666 1599 99 $1,600 Useable proceeds $80,000 25 (compensating balance) $20,000 $80,000 $20,000 $60,000 1600 $60,000 360 60 0266666 6 15999 16 or 16 o EAR (1 daily rate) 360 of days 1 (1 0266667)6 1 17105 or 17 11 16 11 Carefree Leisure has a 40 day discount interest loan outstanding The principal amount of the loan is $60,000, its quoted interest rate is 12 percent, and there is no compensating balance requirement Compute the loan's APR and EAR APR loan cost useable funds 360 of days Need interest 60,000 x 12 360 40 7200 111111 $800 Discount loan 60,0000 800 $59,200 APR loan cost useable $800 $59,200 360 40 0135135 9 1216215 12 16 EAR (1 0135135)9 1 12840 or 12 84 16 18 Refer to the information provided in Problem 16 17 Suppose PDQ needs $90,000 today to pay past due bills How much must PDQ borrow for each loan so that it has $90,000 available to pay the bills How much of the total amount borrowed PDQ will be able to use Loan A) $90,000 x 12 $10,800 $90,000 10,800 $100,800 Loan B) $90,000 x 13 33 $11,997 00 $90,000 $11,997 $101,997 16 17 PDQ Enterprise can borrow from its bank using a one year o o o (a) APR 12 EAR 12 simple interest loan with a 12 percent quoted rate and no compensating balance or o o o (b)APR 10 0 100 10 15 x 360 360 13 33 EAR (1 13333)1 1 13 33 discount interest loan with a quoted rate equal to 10 percent that requires a 15 percent compensating balance What is the EAR of the lower cost loan PDQ normally tries to keep its checking account balance close to $0

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please check answers for correctness. thank you. 162. What is the APR and on the non-free credit associated with credit terms of? (a)2/15, net 45

please check answers for correctness. thank you.

162. What is the APR and on the non-free credit associated with credit terms of?

(a)2/15, net 45 =16.32%

2/98 x 360/45 = .16326

(b)3/5 net 45 = 24.74%

3/97 x 360/45 = .2474

167. Pennsylvania Air Transportation (PAT) borrowed $80,000 for 60 days from its bank. The stated interest rate on the loan is 12 percent. Calculate the APR and assuming the loan is a simple interest loan with

a) 25 percent compensating balance requirement, and CAT currently holds no funds at the lending bank.
(a)APR = cost of loan/useable proceeds * 360/# of days
Need Interest ($80,000 * .12) *60/360 = $9,600 *.1666666 = $1,599.99 = $1,600
APR = $1,600 / $80,000 *360/60 = .02 * 6 = .12 or 12%
no compensating balance requirement and
EAR = (1 + daily rate)^{360/# of days} 1 = (1 + .0266667₎^{6 -1} = .12616 or 12.62%
(b) APR = Cost of loan/useable proceeds * 360/# of days
Need interest (80,000 *.12) * 60/360 = $9,600 * .16666666 = 1599.99 = $1,600
Useable proceeds = $80,000 * .25 (compensating balance) = $20,000 = $80,000 - $20,000 = $60,000
1600/$60,000 * 360/60 = .0266666 * 6 = .15999 = .16 or 16%
EAR = (1 + daily rate) ^{360/# of days} 1 = (1 + .0266667)^{6 -}1 = .17105 or 17.11%
1611. Carefree Leisure has a 40-day discount interest loan outstanding. The principal amount of the loan is $60,000, its quoted interest rate is 12 percent, and there is no compensating balance requirement. Compute the loans APR and EAR.
APR = loan cost/useable funds * 360/# of days
Need interest = 60,000 x 12% * 360/40 = 7200 * .111111 = $800
Discount loan = 60,0000 800 = $59,200
APR = loan cost/useable = $800/$59,200 *360/40 = .0135135*9 = .1216215= 12.16%
EAR= (1 + .0135135)^{9- 1} = .12840 or 12.84%
1618.
Refer to the information provided in Problem 1617. Suppose PDQ needs $90,000 today to pay past-due bills. How much must PDQ borrow for each loan so that it has $90,000 available to pay the bills? How much of the total amount borrowed PDQ will be able to use?
Loan A)
$90,000 x 12% = $10,800
$90,000 + 10,800 = $100,800
Loan B)
$90,000 x 13.33% = $11,997.00
$90,000 + $11,997 = $101,997
1617.
PDQ Enterprise can borrow from its bank using a one-year
(a) APR = 12%
EAR = 12%
simple interest loan with a 12 percent quoted rate and no compensating balance or
(b)APR = 10 + 0x360= 13.33%
100-10-15 360
EAR = (1+.13333)¹ 1 = 13.33%
discount interest loan with a quoted rate equal to 10 percent that requires a 15 percent compensating balance. What is the EAR of the lower cost loan? PDQ normally tries to keep its checking account balance close to $0.

16-2. What is the APR and on the non-free credit associated with credit terms of? (a)2/15, net 45 =16.32% 2/98 x 360/45 = .16326 (b)3/5 net 45 = 24.74% 3/97 x 360/45 = .2474 16-7. Pennsylvania Air Transportation (PAT) borrowed $80,000 for 60 days from its bank. The stated interest rate on the loan is 12 percent. Calculate the APR and assuming the loan is a simple interest loan with o a) 25 percent compensating balance requirement, and CAT currently holds no funds at the lending bank. o (a)APR = cost of loan/useable proceeds * 360/# of days o Need Interest - ($80,000 * .12) *60/360 = $9,600 *.1666666 = $1,599.99 = $1,600 o APR = $1,600 / $80,000 *360/60 = .02 * 6 = .12 or 12% o o no compensating balance requirement and o o EAR = (1 + daily rate) 360/# of days - 1 = (1 + .0266667)6 -1 = .12616 or 12.62% o o (b) APR = Cost of loan/useable proceeds * 360/# of days o o o Need interest (80,000 *.12) * 60/360 = $9,600 * .16666666 = 1599.99 = $1,600 Useable proceeds = $80,000 * .25 (compensating balance) = $20,000 = $80,000 $20,000 = $60,000 1600/$60,000 * 360/60 = .0266666 * 6 = .15999 = .16 or 16% o EAR = (1 + daily rate) 360/# of days - 1 = (1 + .0266667)6 -1 = .17105 or 17.11% 16-11. Carefree Leisure has a 40-day discount interest loan outstanding. The principal amount of the loan is $60,000, its quoted interest rate is 12 percent, and there is no compensating balance requirement. Compute the loan's APR and EAR. APR = loan cost/useable funds * 360/# of days Need interest = 60,000 x 12% * 360/40 = 7200 * .111111 = $800 Discount loan = 60,0000 - 800 = $59,200 APR = loan cost/useable = $800/$59,200 *360/40 = .0135135*9 = .1216215= 12.16% EAR= (1 + .0135135)9- 1 = .12840 or 12.84% 16-18. Refer to the information provided in Problem 16-17. Suppose PDQ needs $90,000 today to pay past-due bills. How much must PDQ borrow for each loan so that it has $90,000 available to pay the bills? How much of the total amount borrowed PDQ will be able to use? Loan A) $90,000 x 12% = $10,800 $90,000 + 10,800 = $100,800 Loan B) $90,000 x 13.33% = $11,997.00 $90,000 + $11,997 = $101,997 16-17. PDQ Enterprise can borrow from its bank using a one-year o o o (a) APR = 12% EAR = 12% simple interest loan with a 12 percent quoted rate and no compensating balance or o o o (b)APR = 10 + 0 100-10-15 x 360 360 = 13.33% EAR = (1+.13333)1 - 1 = 13.33% discount interest loan with a quoted rate equal to 10 percent that requires a 15 percent compensating balance. What is the EAR of the lower cost loan? PDQ normally tries to keep its checking account balance close to $0