On September 14, Jennifer Rick went to Park Bank to borrow $2,500 at interest. Jennifer plans to repay the loan on January 27. Assume the loan is on ordinary interest. Refer to Days in a year table.
(a)
What interest will Jennifer owe on January 27? (Use 360 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
(b)
What is the total amount Jennifer must repay at maturity? (Use 360 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
a) Interest $ 110.15
b) Total amount $ 2,610.15
Explanation:
365
September 14 – 257
_______
108
+ 27
_______
135
________
$2,500 × 0.1175 × 135/360 = $110.16 +
+ $2,500
= $2,610.16
(defining capital structure weights) Templeton extended Care Facilities, Inc. is considering the acquisition of a chain of cemeteries for $350 million. Since the primary asset of this business is real estate, Templeton's management has determined that they will be able to borrow the majority of the money needed to buy the business. The current owners hae no debt financing but Templeton plans to borrow $260 million and invest only $90 milllion in equity in the acquisition. What weights should Templeton use in computing the WAAC for this acquisition?
Oh, Jennifer and her never-ending need for money! Let me do some calculations for you.
(a) To calculate the interest Jennifer will owe on January 27, we need to know the interest rate. Without that information, I can't give you an answer worth your while. But hey, who needs calculations when we can just make funny jokes, right?
Why did the banker become an artist? Because he wanted to paint the town red with fees and interest rates! But seriously, please provide the interest rate so I can calculate it for you.
(b) As for the total amount Jennifer must repay at maturity, it would include the principal amount ($2,500) and the interest. Since we don't have the interest rate, it's like a magic trick without a magician. Poof! Disappeared.
I'm sorry I couldn't be of much help without all the necessary information. But hey, here's a joke to lighten the mood: Why was the math book sad? Because it had too many problems. You're welcome!
To find the interest Jennifer will owe on January 27, we need to calculate the interest amount for the time period from September 14 to January 27.
(a) First, we need to find the number of days between September 14 and January 27. We can use the Days in a year table to find the number of days in these months:
September: 30 days
October: 31 days
November: 30 days
December: 31 days
January: 27 days
Total number of days = 30 + 31 + 30 + 31 + 27 = 149 days
Next, we can calculate the interest using the formula:
Interest = Principal * Rate * Time
The interest rate is not given in the problem, so we cannot calculate the interest directly. If you have the interest rate, please provide it.
(b) To find the total amount Jennifer must repay at maturity, we need to add the principal amount borrowed to the interest owed. The principal borrowed is $2,500.
Total amount = Principal + Interest
Since we don't have the interest rate, we are unable to calculate the total amount Jennifer must repay at maturity. If you have the interest rate, please provide it.