Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

kindly assist to solve with formula and explanation. ty Helen takes a loan of $50,000 from a bank at a nominal interest rate of 9%

kindly assist to solve with formula and explanation. ty

image text in transcribed
Helen takes a loan of $50,000 from a bank at a nominal interest rate of 9% per year compounded monthly. The loan is to be repaid in 3 years with 36 equal end-of-month equal payments. (a) What is the effective monthly interest rate of the loan? (1 mark) (b) What is the effective annual interest rate of the loan? (1 mark) (c) What is Helen's monthly payment for the loan? (2 marks) (d) Helen has just made the 12" payment to the Bank. How much does she still owe the bank? (2 marks) (e) Helen has just made the 12" payment to the Bank. Having gotten richer recently, she wishes to fully settle the loan with just 6 more monthly payments instead of the original 24 more payments. How much is the new monthly payment assuming that there is no change in the interest rate charged by the bank? (2 marks) (f) Suppose that right at the start of the loan, Helen could only afford to pay $1,038 a month. how many months would she need to pay back the loan? (2 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials Of Accounting

Authors: Robert N Anthony, Leslie K Breitner

10th Edition

136071821, 9780136071822

More Books

Students also viewed these Economics questions

Question

1. Too reflect on self-management

Answered: 1 week ago

Question

Food supply

Answered: 1 week ago