A bank is offering loan of $25,000 with a nominal interest rate of 18% compounded monthly, payable
Question:
A bank is offering loan of $25,000 with a nominal interest rate of 18% compounded monthly, payable in 60 months. (Hint: The loan origination fee of 2% will be taken out from the loan amount.)
(a) What is the monthly payment?
(b) If a loan origination fee of 2% is charged at the time of the loan, what is the effective interest rate?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 65% (20 reviews)
P 25000 n 60 months i 18 per year 15 per month a A 25000 AP 15 60 635 b P 25000 ...View the full answer
Answered By
Mishark muli
Having any assignments and any other research related work? worry less for I am ready to help you with any task. I am quality oriented and dedicated always to produce good and presentable work for the client once he/she entrusts me with their work. i guarantee also non plagiarized work and well researched work to give you straight As in all your units.Feel free to consult me for any help and you will never regret
4.70+
11+ Reviews
37+ Question Solved
Related Book For
Question Posted:
Students also viewed these Economics questions
-
A bank is offering a loan of $25,000 with a nominal interest rate of 18% compounded monthly, payable in 60 months. (a) What is the monthly payment? (b) If a loan origination fee of 2% is charged at...
-
A bank is offering an interest rate call with an expiration of 45 days. The call pays off based on 180-day LIBOR. The volatility of forward rates is 17 percent. The 45-day forward rate for 180-day...
-
A bank is offering to sell 6-month certificates of deposit for $9500. At the end of 6 months, the bank will pay $10,000 to the certificate owner. Based on a 6-month interest period, compute the...
-
Determine the largest force P that can be exerted at the jaws of the punch without exceeding a stress of 16 ksi on section m-n of the frame.
-
Why has retail medicine become popular with consumers? How can health care managers and organizations leverage retail medicine concepts to enhance current service delivery practices in non-retail...
-
Recognizing and measuring impairment losses. Give the journal entry to recognize an impairment loss. if appropriate, in each of the following cases under U.S. GAAR If a loss does not qualify as an...
-
Globalization and Capital Mobility. How does capital mobility typically differ between industrialized countries and emerging market countries?
-
Under what conditions would a business wish to enter foreign markets by extending licenses or franchises to local businesses to produce its goods?
-
Do You think one trust builder is more important than the other and why? How do knowledge bases help build trust and relationships?
-
Your investment bank has an investment of $100 million in the stock of the Swiss Roll Corporation and a short position in the stock of the Frankfurter Sausage Company. Here is the recent price...
-
The Rule of 78's is a commonly used method of computing the amount of interest when the balance of a loan is repaid in advance. Adding the numbers representing 12 months gives 1+ 2 + 3+ 4 + 5 +... ....
-
Our cat, Fred, wants to purchase a new litter box. The cost is $100 and he'll finance it over 2 years at an annual rate of 18% compounded monthly and to be repaid in 24 monthly payments. (a) What is...
-
The Oregon Department of Fish and Wildlife (OFW) issued regulations that commercial crab catchers need permits from OFW, as it would limit when crabbing could occur and how many crabs could be...
-
Describe the customer's needs and expectations of the following customer types in relation to the hotel industry. Backpackers and solo travellers Couples Families Business travellers Staff Suppliers
-
Cape Machinery sells various types of machinery and equipment. You have been provided with the attached sales data records. You noted different date formats are used in the document. The records are...
-
Suppose components are sorted into many bins, such that the mean weight of the component bins is 5 pounds (lb) with a standard deviation of 0.3 lbs. A certain buyer always measures weight in ounces...
-
In the game of 5-card draw poker using a standard deck of 52playing cards, it is often counter-intuitive that drawing astraight (i.e. five cards of sequential rank) is more likely tooccur than...
-
At Grande Anse Beach the height of the water in metres is modelled by the function h(t) = pcos(qx , where t is the number of hours after 21:00 hours on 10 December 2017. The following diagram si the...
-
Landfill operations may be reported in a governmental fund or a proprietary fund. Assume an operating landfill is estimated to be 40 percent filled. Total expected future costs of closure and...
-
How has the globalization of firms affected the diversity of their employees? Why has increased diversity put an additional burden on accounting systems?
-
Amazon.com issued an initial public offering in May 1997. Prior to its IPO, the following information on shares outstanding was listed in the final prospectus: In the IPO, the firm issued 3,000,000...
-
The projected market value and M&O costs associated with a presently owned machine are shown (next page). An outside vendor of services has offered to provide the service of the existing machine at a...
-
BioHealth, a biodevice systems leasing company, is considering a new equipment purchase to replace a currently owned asset that was purchased 2 years ago for $250,000. It is appraised at a current...
-
For the estimates in Problem use a spreadsheet-based analysis to determine the first cost for the augmentation of the current system that will make the defender and challenger break even. Is this a...
-
Which of the following is an internal control?Select one:a.A review of receipts against deposits.b.A monthly trial balance which ensures that all accounts are properly balanced.c.Keeping of petty...
-
Which of the following is not a motivating factor to move a firm's operations overseas? a. Lower production costs. b. High overseas taxes on non-repatriated earnings. c. Avoidance of tariffs. d....
-
Portal Doors sells steel entry doors for $285 each. The firm has fixed costs of $380,000 and variable costs per unit of $125. What is Portal's break-even point in sales dollars? Select answer from...
Study smarter with the SolutionInn App