Question
Antonio Menifee borrowed money from a bank to finance a small fishing boat. The banks terms allowed him to defer payments (including interest) on the
Antonio Menifee borrowed money from a bank to finance a small fishing
boat. The bank’s terms allowed him to defer payments (including interest)
on the loan for six months and to make 36 equal end-of-month payments
thereafter. The original bank note was for $16,000 with an interest rate of 9%
compounded monthly. After 16 monthly payments, Antonio found himself in
a financial bind and went to a loan company for assistance in lowering his
monthly payments. Fortunately, the loan company offered to pay his debts in
one lump sum if he would pay the company $308.29 per month for the next
36 months. What monthly rate of interest is the loan company charging on this
transaction?
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Econometric Analysis
Authors: William H. Greene
5th Edition
130661899, 978-0130661890
