Question
Is the following statement true or false and why? If we switch from annual to monthly payments on an annuity loan with interest rate i,
Is the following statement true or false and why?
If we switch from annual to monthly payments on an annuity loan with interest rate i, the term of the loan is shortened, provided that the monthly interest rate im satisfies the equation (1+im)12 = 1+i
Please explain in detail. Thank you so much in advance.
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Financial Management EMEA Theory And Practice
Authors: Michael Ehrhardt, Roland Fox, Eugene Brigham
2nd Edition
1473760216, 9781473760219
