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%)

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%)

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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