TBTF Bank makes a 12 year loan to AFC Inc of $1,600,000.00. The interest rate on the loan is i(2) = 14.000%, and the loan will be repaid with level monthly payments. TBTF reinvests the payments at an interest rate of i(52) = 15.750%. At maturity, what is TBTF Bank's annual ROI over the lifetime of the loan? (AFC does not default.) a.16.099% b.16.421% c.17.064% d.15.294% e.19.318%

TBTF Bank makes a 12 year loan to AFC Inc of $1,600,000.00. The interest rate on the loan is i(2) = 14.000%, and the loan will be repaid with level monthly payments. TBTF reinvests the payments at an interest rate of i(52) = 15.750%. At maturity, what is TBTF Bank's annual ROI over the lifetime of the loan? (AFC does not default.) a.16.099% b.16.421% c.17.064% d.15.294% e.19.318%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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