View the step-by-step solution to:

A store will give you a 1.25% discount on the cost of your purchase if you pay cash today. Otherwise, you will be billed the full price with payment...

A store will give you a 1.25% discount on the cost of your purchase if you pay cash today. Otherwise, you will be billed the full price with payment due in 1 month. What is the implicit borrowing rate being paid by customers who choose to defer payment for the month? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

  Effective annual rate

%  


You take out a 20-year $300,000 mortgage loan with an APR of 12% and monthly payments. In 10 years you decide to sell your house and pay off the mortgage. What is the principal balance on the loan? (Round the monthly loan payment to 2 decimal places when computing the answer. Round your answer to 2 decimal places.) 

  Principal balance on the loan

$  


Home loans typically involve “points,” which are fees charged by the lender. Each point charged means that the borrower must pay 1% of the loan amount as a fee. For example, if the loan is for $190,000 and 3 points are charged, the loan repayment schedule is calculated on a $190,000 loan but the net amount the borrower receives is only $184,300. Assume the interest rate is 1.25% per month. What is the effective annual interest rate charged on such a loan, assuming loan repayment occurs over 132 months? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Use a financial calculator or Excel.)

  Effective annual interest rate

%  



Top Answer

Hello student, I can handle your question though it requires a lot of work for you to get the... View the full answer

1 comment
  • Please mark as unhelpful
    • ka_moderator
    • Jul 20, 2016 at 1:52pm

Sign up to view the full answer

Other Answers

Answer :- 1.)  Let the Purchase price =  $1 . If Pay Today = 1 - 3%(discount) =  $.97 If pay after one month The Deferred... View the full answer

1 comment
  • The answer to all three questions were wrong. I'm still trying to figure out how to work these problems
    • whitfield2003
    • Jul 19, 2016 at 8:28pm

Answer :- 1.)  Let the Purchase price =  $1 . If Pay Today = 1 - 3%(discount) =  $.97 If pay after one month The Deferred... View the full answer

1 comment
  • the calculations you are using in all the problems are wrong. In question 1, the discount is 1.25% not 3%
    • whitfield2003
    • Jul 19, 2016 at 8:34pm

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online