Juan is taking out an amortized loan for $98,000 to open a small business and is deciding between the offers from two lenders. He wants to know which one would be the better deal over the life of the small business loan, and by how much. Answer each part. Do not round intermediate computations, and round your answers to the nearest cent. If necessary, refer to the list of financial formulas. (a) A bank has offered him a 10-year small business loan at an annual interest rate of 11.3%. Find the monthly payment. 2$ (b) A savings and loan association has offered him a 8-year small business loan at an annual interest rate of 14.2%. Find the monthly payment. (c) Suppose Juan pays the monthly payment each month for the full term. Which lender's small business loan would have the lowest total amount to pay off, and by how much? O Bank The total amount paid would be $| less than to the savings and loan association. O Savings and loan association The total amount paid would be $| less than to the bank.
Juan is taking out an amortized loan for $98,000 to open a small business and is deciding between the offers from two lenders. He wants to know which one would be the better deal over the life of the small business loan, and by how much. Answer each part. Do not round intermediate computations, and round your answers to the nearest cent. If necessary, refer to the list of financial formulas. (a) A bank has offered him a 10-year small business loan at an annual interest rate of 11.3%. Find the monthly payment. 2$ (b) A savings and loan association has offered him a 8-year small business loan at an annual interest rate of 14.2%. Find the monthly payment. (c) Suppose Juan pays the monthly payment each month for the full term. Which lender's small business loan would have the lowest total amount to pay off, and by how much? O Bank The total amount paid would be $| less than to the savings and loan association. O Savings and loan association The total amount paid would be $| less than to the bank.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Juan is taking out an amortized loan for $98,000 to open a small business and is deciding between the offers from two
lenders.
He wants to know which one would be the better deal over the life of the small business loan, and by how much.
Answer each part. Do not round intermediate computations, and round your answers to the nearest cent.
If necessary, refer to the list of financial formulas.
(a) A bank has offered him a 10-year small business loan at an annual interest rate of
11.3%. Find the monthly payment.
?
(b) A savings and loan association has offered him a 8-year small business loan at an
annual interest rate of 14.2%. Find the monthly payment.
$
(c) Suppose Juan pays the monthly payment each month for the full term. Which lender's
small business loan would have the lowest total amount to pay off, and by how much?
Bank
The total amount paid would be $| less than to the savings and loan association.
Savings and loan association
The total amount paid would be $ less than to the bank.
Transcribed Image Text:When Charlie had 5 years left in college, he took out a student loan for $17,497. The loan has an annual interest rate of
4.2%. Charlie graduated 5 years after acquiring the loan and began repaying the loan immediately upon graduation.
According to the terms of the loan, Charlie will make monthly payments for 5 years after graduation. During the 5 years he
was in school and not making payments, the loan accrued simple interest.
Answer each part. Do not round intermediate computations, and round your answers to the nearest cent. If necessary, refer
to the list of financial formulas.
(a) If Charlie's loan is subsidized, find his monthly payment.
?
Subsidized loan monthly payment: $
(b) If Charlie's loan is unsubsidized, find his monthly payment.
Unsubsidized loan monthly payment: $
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