Question

right make offers EAR loans pf 8.74 and requires a monthly pynent on all loans what is the apr for these monthly loans? what is the monthly pyment for a loan of A) 220,000 for 6 years B) 475000 for 12 years C) 1,450,000 for 28 years? what is the APR for these monthly payments

Score: 0 of 1 pt 3 of 100 complete HW Score: 0%, 0 of 10 pts Question Help P15-4 (similar to) Straight bank loan. Right Bank offers EAR tons of 8.74% 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 $220,000 for years. b) 5475.000 for 12 years, ore) 51,450.000 for 25 year? What is the APR for these monthly loan? Moured to three decimal places)

Answer 1

APR equivalent to EAR of 8.74%= 8.408274% as follows:

C4 fic =(1+C1)^(1/C3)-1 В. Given с 8.74% Monthly A 1 EAR= 2 Frequency 3 Times compounded a year (t) 4 Monthly rate 5 APR (Monthly compounding) 12 ((1+C1)^1/C3)-1 C4*C3 0.00700689 8.408274%

Monthly payment of Loan A= $3,901.32

Monthly payment of Loan B= $5,248.58

Monthly payment of Loan C= $11,235.72

Calculations as follows:

A B D F E Amount in $ 1 Function 2 Formula arguments Case A Case B Case C 3 Loan amount (L) Given 220,000.00 475,000 1,450,000 4 Number of years (N) Given 6 12 28 5 Number of payments N*12 Nper 72 144 336 6 Interest rate per year (APR) As above 8.408274% 8.408274% 8.408274% 7 Interest rate per month APR/12 0.007006895 0.007006895 0.007006895 8 Future value FV 0 0 0 9 Timing of payment End of month Type 0 0 0 10 Monthly payment (P) =PMT(D7,D5,D3*-1,D8,09) =PMT(E7,E5,E3*-1,E8,E9) =PMT(F7,F5,F3*-1,F8,79) 11 3,901.32 5,248.58 11,235.72