Straight bank loan.
Right Bank offers EAR loans of 8.57% and requires a monthly payment on all loans. What is the APR for these monthly loans? What is the monthly payment for a loan of
(a) $215,000 for 6 years,
(b) $460,000 for 14 years,
or
(c) $1,100,000 for 28 years?
What is the APR for these monthly loans?
APR of these monthly payments =((1+EAR)^(1/n)-1)*n
=((1+8.57%)^(1/12)-1)*12 =8.25079% or 8.25%
a) PV of loan =215000
Number of periods =6*12 =72
Monthly rate =8.25079%/12
Monthly Payment =PV/((1-(1+r)^-n)/r)
=215000/(((1-(1+8.25079%/12)^-72)/(8.25079%/12))=3796.03
b. PV of loan =460000
Number of periods =14*12 =168
Monthly rate =8.25079%/12
Monthly Payment =PV/((1-(1+r)^-n)/r)
=460000/(((1-(1+8.25079%/12)^-168)/(8.25079%/12))=4625.81
c. PV of loan =1100000
Number of periods =28*12 =336
Monthly rate =8.25079%/12
Monthly Payment =PV/((1-(1+r)^-n)/r)
=1100000/(((1-(1+8.25079%/12)^-336)/(8.25079%/12))=8403.83
Straight bank loan. Right Bank offers EAR loans of 8.57% and requires a monthly payment on...
Straight bank loan. Right Bank offers EAR loans of 8.97 % and
requires a monthly payment on all loans. What is the APR for these
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Straight bank loan. Right Bank offers EAR loans of 8.97% and requires a monthly payment on all loans. What is the APR for these monthly loans? What is...
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