Question

# formula needed answers below

1) You are thinking of starting a business after

graduation. Being a new business, the banks won't loan you money so you borrow the $20,000 you need from your brother. Your brother decides to do you a favor and charge you simple interest at only 4% APR. You plan to pay him back in three years. How much will you have to pay back in total (maturity value)?

2) The Central Oregon Economic Development council uses its Small Business Financing Program to assist businesses with short-term loans in operating their business. Bill's Cabinets decides to borrow $50,000 for 8 months at 6.2% APR. Bill must make monthly **interest-only** payments and then repay the loan at the end of the term. What are the monthly **interest-only** payments? How much is his final payment? (365)

3) You are starting a new bookkeeping and tax business and need $7,500 to set up your new office and print promotional literature. You will be able to pay the loan off after tax season. The terms of the loan are 160 days at 7% APR. What is the interest portion of the payment? What is the maturity value? Answer based on both 365 and 360 days.

4) You are looking at three different loan options to borrow $1000 for one year. The terms are as follows:

Loan A 12% APR payable annually

Loan B 12% APR payable every six months

Loan C 12% APR payable monthly

Which loan has the best terms? Justify your choice.

5) Your 6-month promissory note has a maturity value of $8360. It has principle of $8,000. What is the simple interest APR charged on the note?

6) The simple interest on a 45-day loan of $5,200 is $55.25. What is the simple interest APR?

7) You borrowed $10,000 from your bank at 5.6% simple interest APR. You took out the loan on March 1 and plan on repaying it on August 1. What is the interest and maturity value of the loan?

8) Franz is planning to borrow $182,000 from Columbia River Bank to build a road into his property. The road building (and loan) will commence on March 17^{th} and the road will be completed on April 27^{th}. At that time the property will be sold and the loan repaid to the bank (April 27^{th}). Terms for the loan are simple interest at 2 (percentage) points over prime plus a 1.5% loan fee (the loan fee is added to the $ amount being borrowed). The Bank's prime rate is 8.75% APR. What is the maturity value?

9) Bill is borrowing $150 from a pawnshop by giving the pawnshop a guitar worth $500. The pawnshop says she can repay the $150 plus 10% interest ($150 x 10 % = $15) in 30 days to redeem the guitar; if he does not repay the loan in 30 days, the pawn shop will sell his guitar. Help bill calculate the APR. (use 365 days)

10) Lee is purchasing ski clothing from a supplier for $2,450. The seller offers a 4% discount if the invoice is paid within 10 days; if not paid within 10 days, the full amount must be paid within 30 days of the invoice date (4/10,n/30). Find the Annual Effective Rate. (use 365 days)

the yellow are the answers

### Recently Asked Questions

- What is time value money

- Fixed costs for manufacturing widgets are $25,000. Determine the fixed cost per unit when the quantity produced is (a) 5,000 and (b) 75,000.

- Need help on the last portion of the question. I have to prove the breakeven in sales, I highlighted the part I cant figure out in red. The numbers in the red