The interest rate on the loan is 7.1% effective annually.Which of the following is the best step

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The interest rate on the loan is 7.1% effective annually. Which of the following is the best step to take before attempting to calculate the required monthly mortgage payment?

a. Convert 7.1% to a nominal annual rate compounded monthly and use this new rate directly to calculate the monthly payments.

b. Convert 7.1% to an effective monthly rate and use this rate directly to calculate monthly payments.

C. Divide 7.1% by 12 to work in months

d. No interest rate conversion needed. 7.1% can be used directly.

Related Book For answer-question

Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

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Posted Date: Jan 04, 2024 12:34 AM

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The interest rate on the loan is 7.1% effective annually.Which of the following is the best step

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The best step to take before attempting to calculate the required monthly mortgage payment is a C... View the full answer

Income Tax Fundamentals 2013

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