Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. a local finance company quotes an interest rate of

A local finance company quotes an interest rate of 17.1 percent on one-year loans. So,...

80.2K

Verified Solution

Question

Finance

A local finance company quotes an interest rate of 17.1 percent on one-year loans. So, if you borrow $20,000, the interest for the year will be $3,420. Because you must repay a total of $23,420 in one year, the finance company requires you to pay $23,420/12, or $1,951.67, per month over the next 12 months. Is the interest rate on this loan 17.1 percent?

a. What rate would legally have to be quoted? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What is the effective annual rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Masterfoods USA states that their color blends were selected by conducting consumer preference tests, which indicated...

Statistics
Q

1. How do the three objective lenses on the microscope you used differ and what are...

Biology
Q

Calculate the pH of the solution that results from mixing 35.0 mL of 0.18 M formic...

Chemistry
Q

Compare and contrast asexual and sexual reproduction methods, and describe various types of asexual reproduction.

Biology
Q

Describe extrinsic controls regulating the diameter of smooth muscle in skeletal muscle arterioles.

Medical Sciences
Q

Explain why we can have "even" and "odd" half range expansions.

Advance Math
Q

132 21 A closed iron ring is held horizontally and a bar 26 magnet is...

Physics
Q

Directions Determine whether a permutation or combination can be used Then solve 19 Three cards...

Geometry
Q

The angle of elevation to the top of a Building in New York is found...

Basic Math
Q

For the following find the discriminant b 4ac and then determine whether one real number...

Algebra
Q

2. Rock Corporation has the following shares outstanding: 8,000 shares of $40 par value, ten...

Accounting
Q

13. Bond Issue Price Requirement: Calculate the issue price of bonds Show work for partial...

Accounting