Answered step by step
Verified Expert Solution
Question
1 Approved Answer
complete part (e-g) as the first 4 parts have been posted separately you can zoom in on the question guys Leo has a car loan
complete part (e-g) as the first 4 parts have been posted separately
you can zoom in on the question guys
Leo has a car loan with 4 years left. The outstanding balance on the loan is $14250 and his monthly payments (at the end of each month) are $350.57. a) What is the nominal annual rate compounded monthly for the loan? b) If the nominal annual rate compounded monthly changes to 4.801000000000001% what is the Present Value of his current payments? c) If his lender will allow him to renegotiate the terms of the loan to the new lower interest rate, but charges him a (3 month's interest rate) penalty of: 3 * (original monthlyRate) * Outstanding Balance, how much is the penalty? d) What would his new payments be? (The penalty from part c) is added to the Outstanding Balance.) e) (T/F) He should refinance. f) If his lender charges him a (Interest Rate Differential) penalty of (originalRate - newRate) * Outstanding Balance * (Number of Payments Remaining), how much is the penalty? g) (T/F) He should refinanceStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started