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ou want to buy a car, and a local bank will lend you $20,000. The loan will be fully amortized over 5 years and the

ou want to buy a car, and a local bank will lend you $20,000. The loan will be fully amortized over 5 years and the nominal interest rate will be 12% with interest paid monthly.

1. What will be the monthly loan payment?

2. What will be the loans EAR?

3. Prepare amortization schedule, if the interest rate is compounded:

a. Monthly

b. Quarterly

c. Semi-Annually

d. Annually And explain why total interest expense is different?

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