A sovereign borroweris considering $100million loan for a 4-year maturity. It will be an amoritizing loan, meaning
Question:
A sovereign borroweris considering $100million loan for a 4-year maturity. It will be an amoritizing loan, meaning that the interest and principal payments will total, annually, to a constant amount over the maturity of the loan. There is, however, a debate over the appropriate interest rate. The borrower believes the appropriate rate for its current credit standing in the market today is 10%, but a number of international banks with which it is negatiating are arguing that is most likely 12% at the minumum 10%. What impact do these different interest rates have on the prospective annual payments?
the annual payment, if the interest rate was 10%, is ___________ Round to the nearest dollar
the annual payment, if the interest rate was 12% is ___________ round to the nearest dollar