You have just purchased a new warehouse. To finance the purchase, you've arranged for a 38-year mortgage loan for 70 percent of the $3,380,000 purchase price. The monthly payment on this loan will be $17,100. a. What is the APR on this loan? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the EAR on this loan? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
You have just purchased a new warehouse. To finance the purchase, you've arranged for
a 38-year mortgage loan for 70 percent of the $3,380,000 purchase price. The monthly
payment on this loan will be $17,100.
a. What is the APR on this loan? (Do not round intermediate calculations and enter
your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What is the EAR on this loan? (Do not round intermediate calculations and enter
your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Annual Percentage Rate: The annual percentage rate (APR) of a loan to a borrower is the total cost of the loan, including fees. The annual percentage rate (APR) is stated in the same way as an interest rate. The cost of borrowing does not include interest rates, but does include additional taxes and fees such as mortgage insurance, the majority of closing expenses, discount points, and loan origination fees.
Effective Annual Rate: The effective yearly rate is the interest rate that is in effect for the whole year. is the nominal interest rate, sometimes known as the "stated rate," expressed in percent. The number of times compounding will take place throughout a period is represented by the formula r = R/100.
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