Jenny is thinking of buying a car costing $120,000 (including COE) as she is already spending about $1,000 a month on taxi, Grab and Gojek. She reckons that she probably needs to just top up a bit more to pay for the monthly instalment. Moreover, she said the interest rate for car loan is very cheap. She is offered a simple flat rate of 2.3% for a loan of $84,000 for a period of 7 years. (i) Compute the effective annual interest rate (EAR) of the car loan.
Jenny is thinking of buying a car costing $120,000 (including COE) as she is already spending about $1,000 a month on taxi, Grab and Gojek. She reckons that she probably needs to just top up a bit more to pay for the monthly instalment. Moreover, she said the interest rate for car loan is very cheap. She is offered a simple flat rate of 2.3% for a loan of $84,000 for a period of 7 years. (i) Compute the effective annual interest rate (EAR) of the car loan.
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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Jenny is thinking of buying a car costing $120,000 (including COE) as she is already spending about $1,000 a month on taxi, Grab and Gojek. She reckons that she probably needs to just top up a bit more to pay for the monthly instalment. Moreover, she said the interest rate for car loan is very cheap. She is offered a simple flat rate of 2.3% for a loan of $84,000 for a period of 7 years.
(i) Compute the effective annual interest rate (EAR) of the car loan.
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