Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please do the second parton the packahe of loans. The answer is 8.26688%. A bank makes a package of three loans to a small business.
Please do the second part"on the packahe of loans". The answer is 8.26688%.
A bank makes a package of three loans to a small business. (a) $120,000 amortized monthly for ten years at a nominal discount rate of 6.8% con- vertible monthly. (b) $100,000 to be repaid by monthly sinking fund payments for ten years where interest is assessed at a rate of 5.4% nominal convertible monthly and the sinking fund carns 4% nominal interest convertible monthly. The bank receives the sinking fund deposits. (c) $200,000 to be repaid with interest at the end of ten years with an effective rate of discount of 8.2% throughout the ten years. Find the banks annual effective yield on cach of these loans individually and on the package of loans over the ten-year period. A bank makes a package of three loans to a small business. (a) $120,000 amortized monthly for ten years at a nominal discount rate of 6.8% con- vertible monthly. (b) $100,000 to be repaid by monthly sinking fund payments for ten years where interest is assessed at a rate of 5.4% nominal convertible monthly and the sinking fund carns 4% nominal interest convertible monthly. The bank receives the sinking fund deposits. (c) $200,000 to be repaid with interest at the end of ten years with an effective rate of discount of 8.2% throughout the ten years. Find the banks annual effective yield on cach of these loans individually and on the package of loans over the ten-year period Step 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