business purchases 3 new press machines for $150,000 each or a total of $450,000. It borrows $315,000 from its local bank. The interest rate on the loan is 6%, the loan term is 7 years. The loan is a closed end credit loan. Depreciation is $45,000 per year on the presses. What is the loan to value ratio for this loan? 60% 40%
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
A business purchases 3 new press machines for $150,000 each or a total of $450,000. It borrows $315,000 from its local bank. The interest rate on the loan is 6%, the loan term is 7 years. The loan is a closed end credit loan.
Step by step
Solved in 2 steps
