Question: use the information in the table to answer question 8 A bank wishes to earn a pure rate of 2 percent, and the inflation premium

use the information in the table to answer question 8

A bank wishes to earn a pure rate of 2 percent, and the inflation premium is 1.6%. The bank uses the Fair Issac Corporation (FiCO) score to determine car loan rate for its customers. Based on an automobile loan applicant's FiCO score, it uses the following risk premium adjustment to the rate it quotes. If John Smith's FICO score drops to 615 , what will be the percent change in the APR? 92.91% 29.43% 11.40% 92.91% 29.43%

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!

Each of the two tanks contains 200 gal of water, in which initially 100 lb (Tank T 1 ) and 200 lb (Tank T 2 ) of fertilizer are dissolved. The inflow, circulation, and outflow are shown in Fig. 88....

Jane Smith applies for a car loan to the bank and the bank quotes her an APR of 4.98 percent. In which range does Jane Smiths FICO score fall? >740 680-699 700-719 660-679 720-739 2. (Table not...

Use the following information for this and the following three questions. A bank wishes to earn a pure rate of 2 percent, and the inflation premium is 1.6%. The bank uses the Fair Issac Corporation...

Use the following information for this and the following three questions. A bank wishes to earn a pure rate of 2 percent, and the inflation premium is 1 . 6 % . The bank uses the Fair Issac...

1 Life Insurance (50') The following table present the cash flow arrangement of a life insurance (including critical illness) policy. Use the information in the table to answer the following...

Assessment Question Week 2 and 3 Demand and Supply, and Elasticity Question 1 7 Marks Due to inflation in Australia in December 2019, the price for petrol increased from AUD 1.35 to AUD 1.45. This...

QUESTION 20 A bank wishes to earn a pure rate of 3 percent, and the inflation premium is 4 percent. The bank uses the Fair Issac Corporation (FICO) score to determine car loan rate for its customers....

QUESTION 14 A bank wishes to earn a pure rate of 3 percent, and the inflation premium is 4 percent. The bank uses the Fair Issac Corporation (FICO) score to determine car loan rate for its customers....

Visit the websites of at least five large corporations and locate a biography of each CEO. What formal management education do these leaders have? In your opinion, what is the appropriate amount of...

A charged belt, 50 cm wide, travels at 30 m/s between a source of charge and a sphere. The belt carries charge into the sphere at a rate corresponding to 100A. Compute the surface charge density on...

The following information is available for Fairmount Industries from year 1 operations: Sales revenue ( 6 3 , 0 0 0 units ) $ 1 , 7 2 5 , 0 0 0 Manufacturing costs Materials$ 2 5 8 , 0 0 0 Variable...

CT Corp Comprehensive Question Canadian Tire Corporation, Limited ( Canadian Tire ) is a family of companies that includes a retail segment and a financial services division, among others. The retail...

Understand the role of financial and non-financial loyalty rewards in enhancing customer loyalty.

Calculate the lifetime value (LTV) of a loyal customer.

Use service tiering to manage the customer base and build loyalty.