A single-payment loan is advantageous to a borrower only if: a. the interest rate is more...
A single-payment loan is advantageous to a borrower only if:
a. the interest rate is more than that on an installment loan offered by commercial banks.
b. funds are expected to be available in the future to repay the loan in a lump sum.
c. the finance charges are calculated using the discount method.
d. the finance charges are calculated using the simple interest method.
e. it has a collateral note.
Homework Answers
funds are expected to be available in the future to repay the loan in a lump sum.
Only if the person has the interest plus principal amount at the end of the loan, the single-payment loan is good.
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A single-payment loan is advantageous to a borrower only if:
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Drop down options: 1. Garret, Mike 2. add-on, simple interest Ch 07: Assignment - Using Consumer...
Drop down options:
1. Garret, Mike
2. add-on, simple interest
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1. the same as, differently from
2. less, plus
3. $9280, $6720
4. -, x, /, +
5. -, x, /, +
6. principal, payback
7. annual, monthly
8. months, years
9. principal, loan disbursement
10. higher than, the same as, lower than
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figure this out....
Compensating balance versus discount loan Weathers Catering Supply, Inc., needs to borrow $ 155,000 for 6 months. State Bank has offered to lend the funds at an annual rate of 8.7% subject to a 9.6% compensating balance. (Note: Weathers currently maintains...
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Drop down options:
1. Garret, Mike
2. add-on, simple interest
Ch 07: Assignment - Using Consumer Loans 10. Comparing payments on installment loans when using the simple interestor add-on methods to compute finance charges Comparing Loan Payments Using the simple interest and Add-on Methods of Interest Computation Installment loans allow borrowers to repay the loan with periodic payments over time. They are more common than single-payment loans because it is easier for most people to pay a fixed amount periodically...
Drop down options:
1. the same as, differently from
2. less, plus
3. $9280, $6720
4. -, x, /, +
5. -, x, /, +
6. principal, payback
7. annual, monthly
8. months, years
9. principal, loan disbursement
10. higher than, the same as, lower than
7. Calculating finance charges using the discount method and APRon a single payment loan You are taking out a single-payment loan that uses the discount method to compute the finance charges. Computing the finance...
A balloon payment is a loan where you pay small amounts of the loan first and then, at the end of the loan, you pay a BIG portion of the acquired debt to liquidate it. Many times, in this type of loan, you pay the interest of the loan first and then, in the last installment, you pay the last part of the interest and the principal. You and your business partners are contemplating the purchase of a commercial building....
Compensating balance versus discount loan Weathers Catering Supply, Inc., needs to borrow $154,000 for 6 months. State Bank has offered to lend the funds at an annual rate of 9.5% subject to a 9.8% compensating balance. (Note: Weathers currently maintains $0 on deposit in State Bank.) Frost Finance Co. has offered to lend the funds at an annual rate of 9.5% with discount-loan terms. The principal of both loans would be payable at maturity as a single sum. a. Calculate...
P16-13 (similar to) Compensating balance versus discount loan Weathers Catering Supply, Inc., needs to borrow $154,000 for 6 months. State Bank has offered to lend the funds at an annual rate of 8.6% subject to a 9.7% compensating balance. (Note: Weathers currently maintains $0 on deposit in State Bank.) Frost Finance Co. has offered to lend the funds at an annual rate of 8.6% with discount-loan terms. The principal of both loans would be payable at maturity as a single...
I need the SEMI-annual rate as well as the effective annual rate
for both State and Frost. Please help me answer these below, I am
running out of chances on the assignment system, and just cannot
figure this out....
Compensating balance versus discount loan Weathers Catering Supply, Inc., needs to borrow $ 155,000 for 6 months. State Bank has offered to lend the funds at an annual rate of 8.7% subject to a 9.6% compensating balance. (Note: Weathers currently maintains...
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