Question
The Bender family has been planning a vacation to Europe for the past two years. Tabb Savings agrees to advance a loan of $8,000 to
The Bender family has been planning a vacation to Europe for the past two years. Tabb Savings agrees to advance a loan of $8,000 to finance the trip provided the Benders pay the loan back in 12 equal monthly installments. Tabb will charge an add- on loan rate of 5.75 percent.
a) How much in interest will the Benders pay under the add-on rate method?
b) What is the amount of each required monthly payment?
c) What is the effective loan rate in this case?
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Handbook Of Environmental And Sustainable Finance
Authors: Vikash Ramiah, Greg N. Gregoriou
1st Edition
012803615X, 978-0128036150
