1. Let's say you take out a $100,000 mortgage loan. The annual interest rate is 12% and...

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1. Let's say you take out a $100,000 mortgage loan. The annual interest rate is 12% and the maturity of the loan is 8 years. You pay annual installments. Now suppose you make a lump sum of $20,000 at maturity to cover the loan. What happens to the periodic payment amount?

2. What would be the annual interest rate for a $5,000,000 bank loan with a 4-month maturity of $125,000 in total interest payments?

Related Book For answer-question

Fundamentals of Corporate Finance

ISBN: 978-0133400694

1st canadian edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi

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Posted Date: Jul 04, 2023 08:18 AM

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1. Let's say you take out a $100,000 mortgage loan. The annual interest rate is 12% and...

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1 When you make a lump sum payment of 20000 at maturity to cover the loan it reduces the remaining p... View the full answer

Fundamentals of Corporate Finance

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