Applying a loan of amount $500,000 with repayment tenor of 36 months and monthly flat rate of
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Question:
Applying a loan of amount $500,000 with repayment tenor of 36 months and monthly flat rate of 0.0640%. The effective annual interest rate is 2.68%, including an annual handling fee of 0.75% and $2,500 cash rebate (the effective annual interest rate excluding cash rebate is 3.02%).
Illustrate how the monthly repayment $14, 208.89 is determined in the following ways.
(a) Effective annual interest rate = 3.02%.
(b) Effective annual interest rate = 2.68%.
Expert Answer:
a Since there is a cash rebate we need to calculate the loan amount first Loan amount 500... View the full answer
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