1. Data Back-Up Systems has obtained a $10,000, 90-day discounted bank loan at an annual interest rate of 14%, payable a

Business, Finance, Economics, Accounting, Operations Management, Computer Science, Electrical Engineering, Mechanical Engineering, Civil Engineering, Chemical Engineering, Algebra, Precalculus, Statistics and Probabilty, Advanced Math, Physics, Chemistry, Biology, Nursing, Psychology, Certifications, Tests, Prep, and more.
Post Reply
answerhappygod
Site Admin
Posts: 899603
Joined: Mon Aug 02, 2021 8:13 am

1. Data Back-Up Systems has obtained a $10,000, 90-day discounted bank loan at an annual interest rate of 14%, payable a

Post by answerhappygod »

1. Data Back-Up Systems has obtained a $10,000, 90-day
discounted bank loan at an annual interest rate of 14%, payable at
maturity.
a. How much interests (in dollars) will the firm pay on the
60-day loan?
b. Find the effective 90-day rate on the loan.
c. Annualize your result in part b to find the effective annual
rate for this loan, assuming that it is rolled over every 90 days
throughout the year under the same terms and circumstances.
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!
Top
Post Reply

Return to “Archived Questions & Answers”