Question
Your bank agreed to lend a 2-year loan to build your factory. The bank would lend $200,000 to you now and would lend an additional
Your bank agreed to lend a 2-year loan to build your factory. The bank would lend $200,000 to you now and would lend an additional $100,000 in one year.
In the first two years, no loan repayment required, and the balance will grow at the 10 percent compounded rate (Interest of 10 percent is APR, which will be charged on the balance monthly).
At the end of the two years, the balance will be converted to a traditional 30-year mortgage at a 6 percent interest rate.
What is balance of loan (principal + interest) at the end of year 2? What will you be paying as monthly mortgage payments?
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