Question
In: Finance
Waylon & Willie Bank of Luckenbach quotes an APR of 13.76% on its small business loans...
Waylon & Willie Bank of Luckenbach quotes an APR of 13.76% on its small business loans up to $100,000 in principal. The bank calculates interest monthly on these loans and adds it to the principal outstanding. The loan (principal and accumulated interest) does not need to be repaid until maturity.
Suppose that you would like to borrow $21,307 for a period of 5 years for your small business. What will your business owe at maturity of the loan?
Enter your answer in dollars and cents; round to the penny.
Solutions
Expert Solution
rate positively ..
| We have to compute the future value | |
| Present value = | 21,307 |
| Monthly rate = 13.76%/12 | 1.15% |
| Period = 12*5 | 60 |
| Future value = | 42229.58 |
| 21307*(1+1.15%)^60 | |
| Ans = | 42229.58 |
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