Loan amortization and EAR
You want to buy a car, and a local bank will lend you $15,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 12% with interest paid monthly.
What will be the monthly loan payment? Round your answer to the nearest cent.
What will be the loan's EAR? Round your answer to two decimal places.
a) The monthly payment is calculated using the PMT function:-
=PMT(12%/12,5*12,15000)
=333.67
b) EAR:-
=(1+rate/n)^n-1
=(1+12%/12)^12-1
=12.68%
Loan amortization and EAR You want to buy a car, and a local bank will lend...
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