Question
Ron borrows $3,000,000 to purchase a warehouse. The annualinterest rate on the loan is 8.25 percent, and the term of the loanis 15 years. A:
Ron borrows $3,000,000 to purchase a warehouse. The annualinterest rate on the loan is 8.25 percent, and the term of the loanis 15 years.
A: What is the monthly payment necessary to amortize thisloan? Round your answer to the nearest penny. Do notinclude any punctuation except a decimal point.
B: What is the balance on the loan at the end of month36? Round your answer to the nearest penny. Do notinclude any punctuation except a decimal point.
C: How much interest will Ron pay in month 37? Roundyour answer to the nearest penny. Do not include anypunctuation except a decimal point.
D: How much principal will Ron pay in month 37? Roundyour answer to the nearest penny. Do not include anypunctuation except a decimal point.
E: How much principal will Ron pay in the fourth year of thisloan (payments 37 through 48)? Round your answer to thenearest penny. Do not include any punctuation except adecimal point.
F: Suppose the loan requires the borrower to pay two discountpoints at the time of origination. If Ron keeps this loan forthe full term of 180 months, what is his effective interestrate? If you think the answer is 12.10%, enter your answer as12.1
G: Suppose the loan requires the borrower to pay two discountpoints at the time of origination. If Ron prepays the loan atthe end of month 48, what is his effective interest rate? Ifyou think the answer is 7.45%, enter your answer as 7.45
H: Suppose Ron refinances the loan at the end of month 48 atthe prevailing interest rate of 8%. Rather than reducing hismonthly payment, however, Ron decides to continue making the samemonthly payments. How many months must Ron continue to makethe payments on this new loan? (Round your answer to twodecimal places. For example, if you think the answer is34.578 months, enter 34.58.)
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