Question
In: Finance
1. You are the financial officer of a non-profit organization that is negotiating a five-year loan...
1. You are the financial officer of a non-profit organization
that is negotiating a five-year loan with a local bank to purchase
a small warehouse. The loan will be for $100,000 at a 6% interest
repaid in five annual installments.
a. What annual payment will you have to make on the loan each
year?
b. Assume your answer to part a above is $24,500. The bank will
charge a loan origination fee of $3,000 dollar that must be paid at
the beginning, plus you must pay $500 to file a release of lien
against warehouse at the end of five years when the loan is paid
off. What is the effective rate of interest on the loan when the
origination fee and release of line fee are taken into
consideration?
Solutions
jeff jeffy answered 7 months agoRelated Solutions
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