Question
A ) You have just purchased a new warehouse. To finance the purchase, youve arranged for a 25-year mortgage for 75 percent of the $4,700,000
A) You have just purchased a new warehouse. To finance the purchase, youve arranged for a 25-year mortgage for 75 percent of the $4,700,000 purchase price. The monthly payment on this loan will be $27,700. (Do not round intermediate calculations. Round the final answers to 2 decimal places.)
1) What is the APR on this loan?
Annual percentage rate _________%
2) What is the EAR on this loan?
Effective annual rate ________%
B)
Given an interest rate of 5.8 percent per year, what is the value at date t = 10 of a perpetual stream of $2,200 annual payments that begins at date t = 20? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)
Perpetuity value ___________ $
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