You are going to purchase a new roll forming line for your broom handle operation. The...

  

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You are going to purchase a new roll forming line for your broom handle operation. The purchase price of the line is $2.2 million. You will make a down payment of $300,000 and finance the rest of the line at 6% APR with 60 monthly payments. At 60 months, a final balloon payment of $200,000 will also be due. (a) What is the effective annual interest rate? (b) What is the amount of your monthly payment? (c) What is the total of payments you have made? (d) What is the total interest you have paid? You are going to purchase a new roll forming line for your broom handle operation. The purchase price of the line is $2.2 million. You will make a down payment of $300,000 and finance the rest of the line at 6% APR with 60 monthly payments. At 60 months, a final balloon payment of $200,000 will also be due. (a) What is the effective annual interest rate? (b) What is the amount of your monthly payment? (c) What is the total of payments you have made? (d) What is the total interest you have paid?

Answer rating: 100% (QA)

a Computation of Effective annual interest rate Annua... View the full answer