You need to borrow funds for 2 weeks but can only get a discount loan with a sta

Question

You need to borrow funds for 2 weeks but can only get a discount loan with a stated rate of interest of 7.5%.

Answer below:

Amount you need in cash:

1. If you need to have $100,000 in cash, how much should you borrow?

2. X - [(.075/52) x 2]X = 100,000

X = 100,000/1- [(.075/52)x2]                        

Solve for X and show your work

(You should get the same answer as the dollar amount in the section of Amount you should borrow above)

Amount you need in cash:

Annual Interest Rate: Length of Loan (weeks): Loan Periods in a Year: Amount you should borrow:

Explanation / Answer

Solution:

X - [(.075/52) x 2]X = 100,000 X = 100,000/1- [(.075/52)x2]  

X = 100,000 / (1-0.00288)

X = $ 100,289.30

Therefore, the answer for thr above equation is $ 100,289.30

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.