Compost Wholesalers presently uses a public warehouse agreement to finance most of its inventory. The...
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Compost Wholesalers presently uses a public warehouse agreement to finance most of its inventory. The average amount of inventory is $3,000,000, the bank lends Compost's 60 percent of the value of the inventory for eight weeks, and the public warehouse fee is $2,500 per week. Total transportation cost for the loan period is 1.5 percent of the average value of the inventory [that is, (0.015) ($3,000,000)], the bank will loan at 6% annum rate. A. Find the loan amount B. Find the interest. C. Find other costs/fees D. Find m and period rate E. Find the annual percentage rate (APR) F. Find the effective annual cost (EAR)
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