Question
A house is for sale for $198,000. You have a choice of two 20-year mortgage loans with monthly payments: (1) if you finance 90% of
A house is for sale for $198,000. You have a choice of two 20-year mortgage loans with monthly payments: (1) if you finance 90% of the price, you can obtain a loan with a 6% rate of interest or (2) if you finance 80% of the price, you can obtain a loan with a 5% rate of interest.
What is the effective annual rate of interest on the additional amount borrowed on the first loan?
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Business Forecasting
Authors: John E. Hanke, Dean Wichern
9th edition
132301202, 978-0132301206
