Your part-time job as Barista at the local coffee house has convinced you that you are ready to buy a $45,000 BMW. Unfortunately you have no money for a down payment. The local bank, Loansforall Savings and Trust, is willing to give you a 4-year loan for the $45,000 you need at 12% annual interest compounding monthly. What will your monthly payments be? $635 $985 $1,565 $1,185 $845

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Loans

A loan is a term that we are all familiar with. The processing of loans is one of the most important functions of a bank. It keeps our economy stable and facilitates the implementation of monetary policies. Let's take a look at the different forms of loans and get some answers to some common questions.