Spreadsheet exercist | Business & Finance homework help

Spreadsheet exercist | Business & Finance homework help.

Spreadsheet Exercise

 

 

 let me know if you have any questions 

 

Your company is considering manufacturing protective cases for a popular new smart-phone. Management decides to borrow $200,000 from each of two banks, First American and First Citizen. On the day that you visit both banks, the quoted prime interest rate is 7%. Each loan is similar in that each involves a 60-day note, with interest to be paid at the end of 60 days.

 

The interest rate was set at 2% above the prime rate on First American’s fixed-rate note. Over the 60-day period, the rate of interest on this note will remain at the 2% premium over the prime rate regardless of fluctuations in the prime rate.

First Citizen sets its interest rate at 1.5% above the prime rate on its floating-rate note. The rate charged over the 60 days will vary directly with the prime rate.

 

TO DO

Create a spreadsheet to calculate and analyze the following for the First American loan:

  • a. Calculate the total dollar interest cost on the loan. Assume a 365-day year.
  • b. Calculate the 60-day rate on the loan.
  • c. Assume that the loan is rolled over each 60 days throughout the year under identical conditions and terms. Calculate the effective annual rate of interest on the fixed-rate, 60-day First American note.

Next, create a spreadsheet to calculate the following for the First Citizen loan:

  • d. Calculate the initial interest rate.
  • e. Assuming that the prime rate immediately jumps to 7.5% and after 30 days it drops to 7.25%, calculate the interest rate for the first 30 days and the second 30 days of the loan.
  • f. Calculate the total dollar interest cost.
  • g. Calculate the 60-day rate of interest.
  • h. Assume that the loan is rolled over each 60 days throughout the year under the same conditions and terms. Calculate the effective annual rate of interest.
  • i. Which loan would you choose, and why?

Spreadsheet exercist | Business & Finance homework help

Calculate your order
Pages (275 words)
Standard price: $0.00
Client Reviews
4.9
Sitejabber
4.6
Trustpilot
4.8
Our Guarantees
100% Confidentiality
All your data is secure and will never be disclosed to third parties. Your essay or assignment is treated as your intellectual property and can never be shared or provided as a sample to aspiring customers.
Original Writing
We complete all papers from scratch. You can get a plagiarism report.
Timely Delivery
You will never have to worry about deadlines – 98% of our assignments are completed on time.
Money Back
We give refunds anytime you feel the work did not meet your expectations. However, we have not refunded any papers in the last 6 months as our team keeps improving their quality and customer service.

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
$0.00
Power up Your Academic Success with the
Team of writers and tutors. We are here for you.
Power up Your Study Success with Experts We’ve Got Your Back.