You want to borrow $300,000 to start a business. The loan initial balance is increased by...

You want to borrow $300,000 to start a business. The loan initial balance is increased by 2% of the loans face value(for loans origination fees, mortgage insurance, credit checks, title searches etc) Your annual payments are calculated using an initial balance of $306,00 an interest rate of 9% and a 20 year term. The bank requires you to refinance the loan in 5years by paying it off with a balloon payment. what interest rate are you paying?

Expert Solution

Let us observe the below table and the interest rate is highlighted in red color.

so, the rate of interest-paying is 3.5%.

Rahul Sunny answered 2 years ago

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