Question: PanAir Reservations ( PAR ) borrowed $ 1 8 0 , 0 0 0 for 7 2 days from its bank. The interest rate on

PanAir Reservations (PAR) borrowed $180,000 for 72 days from its bank. The interest rate on the loan is 9 percent. Assume there are 360 days in a year.
Calculate the APR and rEAR assuming the loan is a simple interest loan with no compensating balance requirement. Do not round intermediate calculations. Round your answers to two decimal places.
APR:
%
rEAR:
%
Calculate the APR and rEAR assuming the loan is a simple interest loan with a 20 percent compensating balance requirement, and PAR currently holds no funds at the lending bank. Do not round intermediate calculations. Round your answers to two decimal places.
APR:
%
rEAR:
%
How much would PAR have to borrow if it needed $180,000 to pay bills and the loan required a 20 percent compensating balance? Round your answer to the neares dollar.
$

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!