OZ Bank finances a $53000 2-year fixed-rate loan with a $70000 1-year fixed-rate CD. Use the repricing model to determine (a) the OZ Bank's repricing (or funding) gap using a 1- year maturity bucket, and (b) the impact of a 30 basis point (0.3%) increase in interest rates on OZ Bank's annual net interest income? OA. $17000,-$51 O B. $70000, $210 O C. -$70000,-$210 O D. -$70000, $210 O E. -$17000, $51
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- Effective Cost of Short-Term Credit Yonge Corporation must arrange financing for its working capital requirements for the coming year. Yonge can: (a) borrow from its bank on a simple interest basis (interest payable at the end of the loan) for 1 year at a 12% nominal rate; (b) borrow on a 3-month, but renewable on rate with 12 end-of-month payments; or (d) obtain the needed funds by no longer taking discounts and thus increasing its accounts payable. Yonge buys on terms of 1/15, net 60. What is the effective annual cost (not the nominal cost) of the least expensive type of credit, assuming 360 days per year?If Capital Two Bank (CTB) finances a $250,000 2-year fixed-rate loan with a $200,000 1-year fixed-rate CD, based on the repricing model, what is the change in CTB's net interest income for the 1-year maturity bucket when interest rates decrease by 100 basis points? OA. $500 OB. $2,000 OC.-$500 ⒸD.-$2,000Data Back-Up Systems has obtained a $10,000, 90-day bank loan at an annual interest rate of 15%, payable at maturity. (Note: Assume a 365-day year.) 1.How much interest (in dollars) will the firm pay on the 90-day loan? Format: 111.11 2.Find the 90-day rate on the loan. Format: 1.11% 3.Annualize your result in part b to find the effective annual rate for this loan, assuming that it is rolled over every 90 days throughout the year under the same terms and circumstances. Format: 11.11%
- Data Back-Up Systems has obtained a $10,000, 90-day bank loan at an annual interest rate of 15%, payable at maturity. Show Solutions and Explanation. (Note: Assume a 365-day year.) A. How much interest (in dollars) will the firm pay on the 90-day loan? (Format: 111.11) B. Find the 90-day rate on the loan. (Format: 1.11%) C. Annualize your result in Part B to find the effective annual rate for this loan, assuming that it is rolled over every 90 days throughout the year under the same terms and circumstances. (Format: 11.11%)A company borrows $100,000 with interest at j₁2 = 9%. The loan is to be amortized by monthly payments of $1550 for as long as necessary. A final smaller payment will be calculated so the loan will be exactly repaid. The outstanding balance immediately after the th th 88 payment is $796.44. What is the value of the 89" and final payment? O A. $790.51 B. $796.44 C. $802.41 D. $808.43Data Back-Up Systems has obtained a $29,000, 90-day bank loan at an annual interest rate of 15%, payable at maturity. (Note: Assume a 365-day year.) a. How much interest (in dollars) will the firm pay on the 90-day loan? b. Find the 90-day rate on the loan. c. Annualize your result in part b to find the effective annual rate for this loan, assuming that it is rolled over every 90 days throughout the year under the same terms and circumstances. Answers a. The amount of interest on the loan is $___. (Round to the nearest cent.) b. The effective 90-day rate is___%. (Round to two decimal places.) c. The effective annual rate is___%. (Round to two decimal places.)
- I need help with d. Basic ARM is made for $250,000 at an initial interest rate of 6 percent for 30 years with annual reset date. The borrower believes that the interest rate at the beginning of the year 2 will increase to 7 percent. a. Assuming that a fully amortizing loan is made, what will monthly payments be during year 1? PMT = $1498.88 b. Base on (a), what will the loan balance be at the end of year 1? FV = $246,929.97 c. Given that the interest rate is expected to be 7 percent at the beginning of year 2, what will monthly payments be during year 2? PMT = $1659.69 d. What will be the loan balance at the end of year 2?Consider the following Balance Sheet for Forward Thinking Commercial Bank(FTCB) (in millions) ASSETS LIABILITIES Floating rate mortgages 250 Demand deposits 300 (currently 14% annually) (currently 5% annually) 30 years fixed rate loans 1 year CD 50 (currently 9% annually) 120 (currently 8% annually) Equity 20 370 370 a. What is FTCB expected net interest income (NII) at year end? b. What is FTCB expected net interest income at year end if interest rates fell by seven percent (7%). c. What is FTCB expected net interest income at year end if interest rates grew by 300 basis points on assets, but decline by 2% on liabilities.The following loan was paid in full before its due date. a) Find the value of h using an appropriate formula. b) Use the actuarial method to find the amount of unearned interest. c) Find the payoff amount. Regular Monthly Payment APR # of Payments Remaining after Payoff 8.7% 4 $214 What is the finance charge per $100 financed? h = $ (Round to the nearest cent.) The unearned interest is about $ (Round to the nearest cent.) The payoff amount is $ Enter your answer in each of the answer boxes. f12 inser f9 f1o f7 fg f6 f4 f5 esc 5 7 8. %24 3 %23
- It is important to know how to build an amortization schedule when firms (or individuals) take out bank loans. It all start with calculating the monthly payment using the formula below.using the formula provided, do calculations to confirm the monthly payment for that loan based on the following information Loan amount (P): $60,000 Number of periods (n): 3 years = 36 months Interest (i): 12% per year = 1% per month (should be expressed as 0.01)Suppose you borrow $2,000 from a bank for one year at a stated annual interest rate of 14 percent, with interest prepaid (a discounted loan). Also, assume that the bank requires you to maintain a compensating balance equal to 20 percent of the initial loan value What effective annual interest rate are yo being chargedProblem E: Effective cost of Short‐term Loan:ABC will be acquiring a P4,000,000 loan from XYZ Bank. 13. The detail are 6‐month term, 3% interest, P40,000 bank chargeand P50,000 compensating balance.Required:13. How much is the compound effective annual interest?
