If You Borrow $5,000 at an Annual Interest Rate of 9.0

question 120

Essay

If you borrow $5,000 at an annual interest rate of 9.0% for six years,what will your repayment(s)be if this is a discount loan?

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Definitions:

Transactions Needs

The requirement for cash or liquid assets for the purpose of meeting immediate expenses or financial obligations.

Collection Float

The time period between when a payment is initiated by a payer and when the funds are available in the payee’s account.

Opportunity Costs

The benefit that is missed or foregone when choosing one alternative over another.

Trading Costs

Expenses associated with buying and selling securities, including broker commissions and spreads.