Question

In: Finance

Assuming monthly compounding, what is the highest rate you can afford on a 60-month APR loan?

You want to borrow $36,000 from your local bank to buy a new sailboat. You can afford to make monthly payments of $750, but no more. Assuming monthly compounding, what is the highest rate you can afford on a 60-month APR loan?

Group of answer choices

  • 8.90 percent

  • 8.95 percent

  • 9.00 percent

  • 9.15 percent

  • 9.20 percent

Solutions

Expert Solution

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Suppose the interest rate is 12% APR with monthly compounding. What is the present value of...
Suppose the interest rate is 12% APR with monthly compounding. What is the present value of an annuity that pays $200 per month for 4 years? Instruction: Type ONLY your numerical answer in the unit of dollars, NO $ sign, NO comma, and round to one decimal places. E.g., if your answer is $7,001.56, should type ONLY the number 7001.6, NEITHER 7,001.6, $7001.6,$7,001.6, NOR 7002. Otherwise, Blackboard will treat it as a wrong answer.
Suppose the interest rate is 9.4 % APR with monthly compounding. What is the present value...
Suppose the interest rate is 9.4 % APR with monthly compounding. What is the present value of an annuity that pays $ 85 every three months for four ​years? ​(Note: Be careful not to round any intermediate steps less than six decimal​ places.)
loan: $ 30,000.00 total payment: $500 APR(%): 8 part A: calculate the period rate assuming monthly...
loan: $ 30,000.00 total payment: $500 APR(%): 8 part A: calculate the period rate assuming monthly compounding partB: do the amortization schedule and use it to answer parts C and D partC: what is the life of your loan part D: what is the total interest payment over the life of the loan?
Suppose that the mortgage rate is 6% APR with monthly compounding. Suppose that the risk-free rate...
Suppose that the mortgage rate is 6% APR with monthly compounding. Suppose that the risk-free rate is 3% APR with monthly compounding ( at term structure). (a) Compute the monthly mortgage payment on a $1,000,000 mortgage 30 year mortgage with monthly payments beginning at t = 1. (b) Compute the the amortization table for t = 1 and t = 2 months. That is, for each month find the interest payment, principal reduction, and remaining principal.
Assuming APRs are equal, the effective interest rate on a loan is highest when: A)        The loan...
Assuming APRs are equal, the effective interest rate on a loan is highest when: A)        The loan has no points and a 30-year maturity and is prepaid in five years B)        The loan has no points and is paid off at maturity in 30 years C)        Points are charged and the loan is paid off at maturity in 30 years D)        Points are charged and the loan has a 30-year maturity but prepaid in five years Which is NOT a component of an adjustable...
You buy a car for $38,000. You agree to a 60-month loan with a monthly interest...
You buy a car for $38,000. You agree to a 60-month loan with a monthly interest rate of 0.55 percent. What is your required monthly payment? Multiple Choice $745.29 $764.07 None of these choices are correct. $634.24 $605.54
Throughout this question, assume annual interest rate is 4.5% with monthly compounding. You are a loan...
Throughout this question, assume annual interest rate is 4.5% with monthly compounding. You are a loan officer in the mortgage department of a local bank. A customer, who has a successful job, walks in and applies for a $600,000 loan to buy a starter home in NYC. The standard terms your bank have been offering to previous customers are as followed: Contract A: a 15-year fixed rate loan, with an annual rate of 4.5% and with fixed monthly installment Contract...
Throughout this question, assume annual interest rate is 4.5% with monthly compounding. You are a loan...
Throughout this question, assume annual interest rate is 4.5% with monthly compounding. You are a loan officer in the mortgage department of a local bank. A customer, who is also a Stevens alum, walks in and applies for a $600,000 loan to buy a starter home in Hoboken. The standard terms your bank have been offering to previous customers are as followed, Contract A: a 15-year fixed rate loan, with an annual rate of 4.5% and with fixed monthly installment....
After making 19 payments on a 60-month, $10000 car loan with APR of 4%, what is...
After making 19 payments on a 60-month, $10000 car loan with APR of 4%, what is the outstanding balance on the loan? Round to the penny.
Amortize a 30-year, $120,000 loan with end-of-month payments. The APR is 12%. What is the monthly...
Amortize a 30-year, $120,000 loan with end-of-month payments. The APR is 12%. What is the monthly payment? What are the interest and repayment portions of the payment in month 12? What is the ending balance after one year (month 12)?  
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT