Purchase Solution

A man walks into a New York City bank and asks for a $5000

Not what you're looking for?

Ask Custom Question

Here's an old story: A man walks into a New York City bank and asks for a $5000 loan, offering his Ferrari, worth $250,000 as collateral. He tells the loan officer that he needs the money for two weeks for an important venture. The loan officer, having the car as security and after checking references, gives the man the money he requested, with a signed agreement that he will pay the money plus $45 in interest when he returns in two weeks. The bank officer takes the car keys and the car is parked in the bank's underground lot. The man returns in exactly two weeks, pays the loan and interest, and reclaims his car. The bank
officer asked him why he was willing to pay such a high interest rate. His reply: where else can I safely park my car for two weeks in New York City for only $45?

A. What annual interest rate did the man pay?
B. How much would the man need to repay at the end of two months if he borrowed $5000 with the same rules and same annual interest rate?

Purchase this Solution
Solution Summary

This solution is comprised of a detailed explanation to answer what annual interest rate did the man pay.

Solution Preview

Here's an old story: A man walks into a New York City bank and asks for a $5000 loan, offering his Ferrari, worth $250,000 as collateral. He tells the loan officer that he needs the money for two weeks for an important venture. The loan officer, having the car as ...

Purchase this Solution
Free BrainMass Quizzes
Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

View More Free Quizzes
Related BrainMass Solutions

  • APR and Interest Rates

    Here's an old story: A man walks into a New York City bank and asks for a $5000 loan, offering his Ferrari, worth $250,000 as collateral. He tells the loan officer that he needs the money for two weeks for an important venture.

  • Project Cash flow, Addition of product

    a) an inventory decrease of $5000 b) an increase in accounts receivable of $1500 C)an increase in fixed assets of $7600 d) a decrease in accounts payable of $2100. 2) Joseph's & Co. purchase a corner lot in Eglon City five years ago at a cost of

  • Irene has made Sara an offer on the purchase of a capital as

    Irene will pay (1) $200,000 cash or (2) $50,000 cash and a 6% installment note for $150,000 guaranteed by City Bank of New York.

  • The Son of Sam Killer

    a man .In late 1976 New York City mayor Abraham Beame and Police Commisioner Michael Codd publicly announced that there was a serial killer on the loose.

  • Descriptive Statistics of a Survey

    Is there any data point that should be considered as an outlier for this data set? Explain why. As a customer walks into the branch office during the lunch hour, she asks the branch manager how long she can expect to wait.

  • Explicit Cost, Implicit Cost or Not Needed to Be Reflected

    271187 Explicit Cost, Implicit Cost or Not Needed to Be Reflected Tom total revenue from his cafe is 50000/ yr, he bought a coffee machine costing $5000 with ($2000 of which is his savings which the bank gave him an interest rate of 5% and $3000 is a

  • Public Administration: Line Items

    For New York City, the 2013 capital budget can be found here: http://www.nyc.gov/html/omb/downloads/pdf/cb6_12.pdf New York city is the largest city in the US. It's budget, of course, is massive and loaded with detail.

  • Consumer Spending

    134010 Macroeconomics The federal Reserve Bank publishes a report called the Beige Book eight times a year that summarizes the current economic conditions in each of the 12 bank districts.

  • Formulating a decision model

    The New York City Development Corporation has just purchased a small hotel for conversion to condominium apartments.

View More Related Solutions