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You are thinking about buying a car, and a local bank is willing to lend you $20,000 to buy the car. Under the terms of
You are thinking about buying a car, and a local bank is willing to lend you $20,000 to buy the car. Under the terms of the loan, it will be fully amortized over 5 years (60 months), and the nominal rate of interest will be 12 percent, with interest paid monthly. a. What would be the monthly payment on the loan? b. What would be the effective annual rate of interest on the loan?
You are thinking about buying a car, and a local bank is willing to lend you $20,000 to buy the car. Under the terms of the loan, it will be fully amortized over 5 years (60 months), and the nominal rate of interest will be 12 percent, with interest paid monthly.
a. What would be the monthly payment on the loan?
b. What would be the effective annual rate of interest on the loan?
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