Consider two loans with one-year maturities and identical face values: a 7.9% loan with a 1.02% loan
Question:
Consider two loans with one-year maturities and identical face values: a 7.9% loan with a 1.02% loan origination fee and a 7.9% loan with a 4.7% (no-interest) compensating balance requirement. Which loan would have the higher effective annual rate? Why?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
To determine which loan has the higher effective annual rate we need to compare the total cost of borrowing for each loan taking into account the inte...View the full answer
Answered By
Rishabh Ojha
During my undergraduate i used to participate as TA (Teaching Assistant) in several electronics and computers subject. I'm passionate about learning Computer Science as my bachelors are in Electronics but i learnt most of the Computer Science subjects on my own which Machine Learning also. At Present, i'm a working professional pursuing my career as a Machine Learning Engineer and i want to help others learn during my free hours, that's all the motivation behind giving tuition. To be frank i have no prior experience of tutoring but i have solved problems on opensource platforms like StackOverflow and github. ~Thanks
3+ Reviews
10+ Question Solved
Related Book For 
Fundamentals Of Corporate Finance
ISBN: 9781292437156
5th Global Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Question Posted:
