Straight bank loan. Left Bank has a standing rate of 7.9% (APR) for all bank loans and requires monthly payments. What is the monthly payment if a loan is for (a) $110,000 for 5 years, (b) $270,000 for 11 years, or (c) $1,150,000 for 25 years? What is the effective annual rate of each of these loans?
Straight bank loan. Left Bank has a standing rate of 7.9% (APR) for all bank loans and requires monthly payments. What is the monthly payment if a loan is for (a) $110,000 for 5 years, (b) $270,000 for 11 years, or (c) $1,150,000 for 25 years? What is the effective annual rate of each of these loans?
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:Straight bank loan. Left Bank has a standing rate of 7.9% (APR) for all bank loans and requires monthly payments. What is the monthly payment if a loan is for (a)
$110,000 for 5 years, (b) $270,000 for 11 years, or (c) $1,150,000 for 25 years? What is the effective annual rate of each of these loans?
Transcribed Image Text:Straight bank loan. Left Bank has a standing rate of 8.2% (APR) for all bank loans and requires monthly payments. What is the monthly payment if a loan is for (a)
$150,000 for 4 years, (b) $260,000 for 10 years, or (c) $1,500,000 for 24 years? What is the effective annual rate of each of these loans?
(a) What is the monthly payment if a loan is for $150,000 for 4 years?
$ 3,676.04 (Round to the nearest cent.)
(b) What is the monthly payment if a loan is for $260,000 for 10 years?
$ 3,182.06 (Round to the nearest cent.)
(c) What is the monthly payment if a loan is for $1,500,000 for 24 years?
$ 11,927.96 (Round to the nearest cent.)
What is the effective annual rate for all three loans?
8.52 % (Round to two decimal places.)
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