Question

A small business owner visits her bank to ask for a loan. The owner states that she can repay a loan at $900 per month for the next two years and then $1,800 per month for three years after that. If the bank is charging customers 8.5 percent APR, how much would it be willing to lend the business owner? (Round your answer to two decimal places.)

Answer 1

Willing to lend the business owner

=900*((1-(1+(8.5%/12))^(-2*12))/(8.5%/12))+(1800*((1-(1+(8.5%/12))^(-3*12))/(8.5%/12)))/(1+(8.5%/12))^(2*12)

=67934.62