Please answer fast I will rate for you sure.... 1. Edison Mfg. needs to borrow $50,000 for sixmonths. If the annual interest rate is 15%, what isthe APY of a loan with interest paid in arrears anda 10% compensating balance?16.67%17.36%16.97%18.42%2. Edison Mfg. needs to borrow $50,000 for sixmonths. If the annual interest rate is 15%, what isthe APY of a discount loan with a 10%compensating balance?16.67%17.56%18.18%19.01%

A compensating balance is the amount that the borrower needs to keep as an average balance with the…

Answered: 1. Edison Mfg. needs to borrow $50,000…

1. Edison Mfg. needs to borrow $50,000 for six months. If the annual interest rate is 15%, what is the APY of a loan with interest paid in arrears and a 10% compensating balance?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 14P

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

Please answer fast I will rate for you sure....

1. Edison Mfg. needs to borrow $50,000 for six
months. If the annual interest rate is 15%, what is
the APY of a loan with interest paid in arrears and
a 10% compensating balance?
16.67%
17.36%
16.97%
18.42%
2. Edison Mfg. needs to borrow $50,000 for six
months. If the annual interest rate is 15%, what is
the APY of a discount loan with a 10%
compensating balance?
16.67%
17.56%
18.18%
19.01%

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