### Simple Interest

Simple interest, principal, etc.

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Simple interest, principal, etc.

Universal Bank pays 7 percent interest, compounded annually, on time deposits. Regional Bank pays 6 percent interest, compounded quarterly. a. Based on effective interest rates, in which bank would you prefer to deposit your money? Why b. Could your choice of banks be influenced by the fact that you might want to withdraw

I need help with problem 3. Please see attachments. 3. Which items in Table 31.8 would be affected by the following events? a. There is a rise in interest rates. b. Suppliers demand interest for late payment. c. Dynamic receives an unexpected bill in the third quarter from the Internal Revenue Service for underpayment

8) Warren calls home from Iraq at a rate (in dollars) of $2.25 for the first minute plus $.20 for each additional minute. If his total bill for the call is $11.65, then for how many minutes did he talk altogether? (Don't forget the first minute). 9) Lindsey is driving on the Beltway on her way to the UMUC campus. Her car

On the day of the child's birth, a proud parent deposits an amount of money into a compound interest savings account that will earn 5% each year. On the child's eighteenth birthday, the account will have accumulated $10,000. How much did the parent deposit on the day of the child's birth?

What's a simple way to assess and compare the default risk of publicly traded bonds? Describe how a bond's interest rate risk is related to its maturity.

1. As treasurer of the Universal Bed Corporation, Aristotle Procrustes is worried about his bad debt ratio, which is currently running at 6 percent. He believes that imposing a more stringent credit policy might reduce sales by 5 percent and reduce the bad debt ratio to 4 percent. If the cost of goods sold is 80 percent of the s

5. Summary - In 1991 an Apache tracker was promised $10,000 for helping to capture the notorious outlaw Denny the Menace. In 2006 the daughter of the tracker claimed that this reward had not been paid. The Treasury Secretary stated that if this was true, the government would be happy to pay the $10,000. However, the daughter al

suppose the deposit $20,000 for 5 yrs @ 8% rate what is the return annually (n = 1) and quarterly (n = 4). Round both to the hundredth place. c) Does compounding annually or quarterly yield more interest and explain d) if a bank compounds continuously the the formula used is A=Pe^rt where e is a constant and equals

Prime or Subprime: The Good, the Bad and the Ugly I am sure most of you, at least I hope so, have followed the national and international effects the meltdown in the Subprime mortgage market. Before we get started, please answer the following question: 1. What exactly is the Subprime Mortgage Market? Please provide detai

Ying Import has several bond issues outstanding, each making semiannual interest payments. The bond are listed in the following table. If the corporate tax rate is 32%, what is the aftertax cost of Ying's Debt? BOND COUPON RATE RICE QUOTE MATURITY FACE VALUE

Question 1 A gold-mining firm is concerned about short-term volatility in its revenues. Gold currently sells for $300 an ounce, but the price is extremely volatile and could fall as low as $280 or rise as high as $320 in the next month. The company will bring 1,000 ounces to the market next month. a. What will be total reven

Kim Co issued $80,000 of 4% bonds on June 1, 2007 at face value. The bonds pay interest semiannually on February 1 and August 1. The bonds are dated February 1, 2006, and a mature on February 1, 2010. The total interest expense related to these bonds for the year ended December 31, 2006 is I am stuck. The actual problem is si

Upon taking office in October 1993, the Bundesbank's new president, Hans Tietmeyer, said, "Forced reductions in central bank interest rates which are contrary to stability policies can neither solve economic or structural problems. But they would undermine trust in currency values, drive long-term interest rates higher and delay

The Florida Boosters Association has decided to build new bleachers for the football field. Total costs are estimated to be $1million, and financing will be through a bond issue of the same amount. The bond will have a maturity of 20 years, a coupon rate of 8% and has annual payments In addition, the Association must set up a re

Saving for Retirement? Better late Than Never! "Boy, this is all so confusing," said John as he stared at the papers on his desk. If only I had taken the advice of my finance instructor, I would not be in such a predicament today." John Andrews, aged 27, graduated five years ago with a degree in business administration and

Chapter 3: What types of personal financial decisions have you made that involve compound interest? Be specific and cite any references. Chapter 4: Read the following article: http://www.investinginbonds.com/MarketAtAGlance.asp?catid=31&id=78 Discuss which type of security you might invest in if you had spare fu

List the long-term debt held by Dell Computers as well as maturity dates and yield to maturity. Please also list the types of stock issued by Dell Computers including the current selling price and the 52-week average selling price. Please review the attached files for the 2005 & 2006 Annual Report.

1. Interest Rate Parity Six month T-bills have a nominal rate of 7%, while default free Japanese bonds that mature in 6 months have a nominal rate of 55%. In the spot exchange market, I yen equals $0.009. If interest rate parity holds, what is the 6 months forward exchange rate?. 2. Purchasing Power Parity: A televisi

QUESTION What is unique in the area of interest Single payer healthcare system which makes conventional economic principles not applicable? http://www.labornotes.org/node/662 http://www.manhattan-institute.org/html/mpr_05.htm Single-Payer Fantasies of Sicko, Michael Moore

14. Assume the interest rate is 16% on pounds sterling and 7% on the Euro. At the same time, inflation is running at an annual rate of 3% in Germany and 9% in England. a. If the Euro is selling at a one-year forward premium of 10% against the pound, is there an arbitrage opportunity? Explain. b. What is the real interest r

6. Suppose that in Japan the interest rate is 8% and inflation is expected to be 3%. Meanwhile, the expected inflation rate in France is 12%, and the English interest rate is 14%. To the nearest whole number, what is the best estimate of the one year forward exchange premium (discount) at which the pound will be selling relative

3. In early 1996, the short-term interest rate in France was 3.7%, and forecast French inflation was 1.8%. At the same time, the short-term German interest rate was 2.6% and forecast German inflation was 1.6%. a. Based on these figures, what were the real interest rates in France and Germany? b. To what would you attribute

Janutis Co. has just issued fixed rate debt at 10 percent. Yet, it prefers to convert its financing to incur a floating rate on its debt. It engages in an interest rate swap in which it swaps variable rate payments of LIBOR plus 1 percent in exchange for payments of 10 percent. The interest rates are applied to an amount that re

1. Corporate debt has been expanding very dramatically since World War II. What has been the impact on interest coverage, particularly since 1977? 2. What are some specific features of bond agreements? 3. What is the difference between a bond agreement and a bond indenture? 1. Why has corporate management become increasingl

21. Tropical Tans is saving money to build a new salon. Three years ago, they set aside $12,000 for this purpose. Today, that account is worth $16,418. What rate of interest is tropical tans earning on this money?

1. A credit card account charges 20% as a nominal annual interest rate compounded monthly. What is the effective annual rate being charged on the unpaid purchase balance if the cardholder makes no payment? a. 21.55% b. 21.94% c. 0.2002% d. 18.37% 2. You invest $1,000 in a account that earns a nominal annual rate of 10%. H

4. Nu-Mode Fashions Inc. manufactures quality women's wear and needs to borrow money to get through a brief cash shortage. Unfortunately, sales and down, and lenders considers the firm risky. The CFO has asked you to estimate the interest rate Nu-Mode should expect to pay on a one-year loan. She's told you to assume a 3% default

I am having problems with calculating the solutions for the following. 1. On October 1, 2006, Frederick Douglass Company issued a $28,000, 10%, nine-month interestbearing note. - If the Frederick Douglass Company is preparing financial statements at December 31, 2006, the adjusting entry for accrued interest will include:

What is Company A' times interest earned given the following? sales = 220,000 total interest charges = $20,000 net profit margin = 6% tax rate = 40% ------------------------ I know that TIE = EBIT/Interest But to get the answer I believe I have to manipulate other formulas, but am not sure which ones. Any assistance