Question: How much would Zoe (a) receive in initial loan proceeds and (b) be required to repay at maturity under the Tennessee State Bank loan? Compute

  1. How much would Zoe (a) receive in initial loan proceeds and (b) be required to repay at maturity under the Tennessee State Bank loan?
  2. Compute (a) the finance charges and (b) the APR on the loan offered by Tennessee State Bank.
  3. Compute (a) the finance charges and (b) the APR on the loan offered by the National Bank of Knoxville. How big a loan payment would be due at the end of two years?
  4. Compare your findings in Questions 2 and 3, and recommend one of the loans to Zoe. Explain your recommendation.
  5. What other recommendations might you offer Zoe regarding the disposition of the loan proceeds?

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