You want to buy a car, and a local bank will lend you $15,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 10% with interest paid monthly. What will be the monthly loan payment? What will be the loan's EAR? Do not round intermediate calculations. Round your answer for the monthly loan payment to the nearest cent and for EAR to two decimal places. Monthly loan payment: $ 318.71 EAR: 4.98 %
You want to buy a car, and a local bank will lend you $15,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 10% with interest paid monthly. What will be the monthly loan payment? What will be the loan's EAR? Do not round intermediate calculations. Round your answer for the monthly loan payment to the nearest cent and for EAR to two decimal places. Monthly loan payment: $ 318.71 EAR: 4.98 %
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 41P
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A loan/mortgage indicates a sum borrowed to meet funding requirements. The funding requirements can be personal or associated with business. The annual rate that is charged over the loan is the nominal rate and the rate that considers the compounding effect as well is recognized as the effective annual rate. The loan can be repaid via multiple periodic payments or a future lump sum payment.
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