Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. your firm is considering two​ one-year loan

Your firm is considering two​ one-year loan options for a $ 541,000 loan. The first carries...

50.1K

Verified Solution

Question

Finance

Your firm is considering two​ one-year loan options for a $541,000 loan. The first carries fees of 2.1% of the loan amount andcharges interest of 4.2% of the loan amount. The other carries feesof 1.8 % of the loan amount and charges interest of 4.7 % of theloan amount.

a. What is the net amount of funds from each​ loan?

b. Based on the net amount of​ funds, what is the true interestrate of each​ loan?

a. What is the net amount of funds from each​loan?

The net amount of funds for option 1 is ​$____. ​(Round to thenearest​ dollar.)

The net amount of funds for option 2 is ​$____. ​(Round to thenearest​ dollar.)

b. Based on the net amount of​ funds, what is the trueinterest rate of each​ loan?

The true interest for loan 1 will be ____%. ​(Round to threedecimal​ places.)

The true interest for loan 2 will be ____%. ​(Round to threedecimal​ places.)

Answer & Explanation Solved by verified expert
4.4 Ratings (687 Votes)
Given Loan Amount 541000 Option 1 Fees 21 Interest 42 Option 2 Fees 18 Interest 47 Option 1 Net Amount of Funds Loan Amount 1 Rate of Fees 541000 1 0021 529639    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

For each of the following solutions, calculate the initial pH and the final pH after adding...

Chemistry
Q

Suppose that your company has decided to change the architecture of the software your team works...

Programming
Q

All work and answers go on paper/tablet other than this quiz page. Mitch of 70 kg is...

Physics
Q

What is NOT a characteristic of a good summary O It contains only the main...

Biology
Q

A hemispherical bowl just floats without sinking in a liquid of density 1 2 x...

Physics
Q

Test the claim about the difference between two population means and 2 at the level...

Geometry
Q

21 B Book Street Books sells about 5200 books each month The pie chart displays...

Statistics
Q

a rectangualr prism has a volume of 60 and a width of 5 what are...

Algebra
Q

Advanced Technologies (AT) produces two compression machines that are popular with manufacturers of plastics: no....

Accounting
Q

Myer's Treats makes institutional cakes. Finished cakes must pass through two departments: Mixing and Baking....

Accounting
Q

Under what circumstances will the predeceased parent rule apply to a transfer to a skip...

Accounting
Q

The cost of an asset is $1,030,000, and its residual value is $140,000. Estimated useful...

Accounting