L9-ch18-sol - CHAPTER18 P.665669 ST2 3A,5A,7A,8A,12A,13A, 1...

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CHAPTER 18  P. 665 – 669 ST2 3A, 5A, 7A, 8A, 12A, 13A,  5B 1
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A) 18% B)  Net cash receive  =  200,000               L  – (20%) L  =  200,000      L = 250,000 CB = (20%) L = $50,000    Interest =  16% x L = 40,000        Net cash receive = $200,000  APR = ( 40,000  200,000 )   = 20%   2 ST2
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C)   Net cash receive     =  200,000 – (20%)L   – (14%)L  =  200,000                                    L = 303,030.30   Interest =  (14%)L = 42,424.24    Net cash receive = $200,000  APR = ( 42,424.24  200,000 ) = 21.21%   3 ST2
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Loan $100,000.  Interest is paid at the beginning Compensating balance =  (10%) 100,000 =  $10,000   Interest = (12% x 3/12)   100,000 = $3,000 Net cash receive =  $100,000  – $10,000     $3,000       = $87,000 APR = ( 3,000  / 87,000)  x 12/3   = 3.45%  x 4   13.79% APY = [ 1 + (0.1379/4) ]  4     – 1 = 14.52% 4 18 – 3A 
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Need $100,000 cash.  Interest is paid at the 
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L9-ch18-sol - CHAPTER18 P.665669 ST2 3A,5A,7A,8A,12A,13A, 1...

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