A loan of $3,000 for a new, high-end laptop computer is to be repaid in 12 end-of-month payments (starting one month from now). The monthly payments are determined as follows. Loan principal Interest for 12 months at 1.7% per month Loan application fee $3,000 612.00 157.44 Total $3,769.44 Monthly payment = $3,769,44/12 = $314,12 What nominal and effective interest rates per year are actually being paid? Hint: Draw a cash-flow diagram from the perspective of the lender. ... Choose the correct cash-flow diagram from the perspective of lender below.
A loan of $3,000 for a new, high-end laptop computer is to be repaid in 12 end-of-month payments (starting one month from now). The monthly payments are determined as follows. Loan principal Interest for 12 months at 1.7% per month Loan application fee $3,000 612.00 157.44 Total $3,769.44 Monthly payment = $3,769,44/12 = $314,12 What nominal and effective interest rates per year are actually being paid? Hint: Draw a cash-flow diagram from the perspective of the lender. ... Choose the correct cash-flow diagram from the perspective of lender below.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A loan of $3,000 for a new, high-end laptop computer is to be repaid in 12 end-of-month payments (starting one month from now). The monthly payments are determined as follows.
Loan principal
$3,000
Interest for 12 months at 1.7% per month
612.00
Loan application fee
157.44
Total
$3,769.44
Monthly payment = $3,769.44/12 = $314.12
What nominal and effective interest rates per year are actually being paid? Hint: Draw a cash-flow diagram from the perspective of the lender.
.....
Choose the correct cash-flow diagram from the perspective of lender below.
А.
В.
$314.12_
$314.12.
1
2
3
11
12
1
3
12
13
$3,000
$3,000
C.
O D.
$3,000
$3,000
$314.12
$314.12
1
2
11
12
1
2
3
12
13
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