1. In order to finance a new warehouse, I took a 30-year-maturity mortgage loan of 80% of $3,400,000. The monthly payment for this mortgage is $16,500. What is the APR for this loan? What is the EAR? (Exercise 45)
2. A financial company notifies 17.1% per annum. If you borrow $20,000 from this company, then the interest payment is $3,420 per year. Since you should pay $23,420 for one year after you get the loan, you are required to pay $23,420/12=$1,9567 a month for twelve months. Is the interest rate for this loan 17.1%? How do you represent an APR? What is the effective annual rate, EAR? (Exercise 51)
3. You would like to buy a car worth of $57,500. According to the sales contract, you are going to pay off $57,500 for 60 months with the 5.9% APR. If you are supposed to pay the monthly payment at the start of each month, what is your monthly payment? (Exercise 54)