Assume you wanted to start a small business and got a $1 million loan for some...
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Assume you wanted to start a small business and got a $1 million loan for some start up capital. The loan is to be repaid over 8 years with monthly payments. You were able to get a good rate on the loan after shopping around and comparing the rates of multiple banks. The loan has an annual interest rate of 8.4%. Unfortunately, the business venture did not go so well and was terminated. You have paid the loan for 2 years and want to close the loan account. What amount would be required to pay off the outstanding loan balance? [10 marks] Assume you wanted to start a small business and got a $1 million loan for some start up capital. The loan is to be repaid over 8 years with monthly payments. You were able to get a good rate on the loan after shopping around and comparing the rates of multiple banks. The loan has an annual interest rate of 8.4%. Unfortunately, the business venture did not go so well and was terminated. You have paid the loan for 2 years and want to close the loan account. What amount would be required to pay off the outstanding loan balance? [10 marks]
Expert Answer:
Answer rating: 100% (QA)
To calculate the outstanding loan balance we need to use the formula for the amortization of a loan ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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