Save Submit Assignment e Questi Problem 5 Check My Work (a rem Click here to rea
ID: 2809563 • Letter: S
Question
Save Submit Assignment e Questi Problem 5 Check My Work (a rem Click here to read the eBlook: Comparing Interest Rates Click here to read the eBook: Amortized Loans LOAN AMORTIZATION AND EAR o. You want to buy a car, and al cal bank wil lend you $10,000 The loan will be fully amortized over S years 60 months and the m minal interest rate w-be 9% with interest paid month .What will be the monthly loan payment? Do not round intermediate steps. Round your answer to the nearest cent. 3 b, what will be the loan's EAA? Do not round intermediate steps. Round your answer to two decimal places.Explanation / Answer
a.
Using financial calculator BA II Plus - Input details:
#
I/Y = Rate/Frequency =
0.750000
FV = Future value =
$0
N = Total payment term x Frequency =
60
PV = Present value of Loan =
-$10,000.00
CPT > PMT = Payment =
$207.58
Alternate formula-based method:
PMT = Payment = |PV| x R% x (1+R%)^N / ((1+R%)^N - 1) =
$207.58
b.
EAR = (1+Rate/12)^12 - 1 = (1+9%/12)^12-1 =
9.38%
Using financial calculator BA II Plus - Input details:
#
I/Y = Rate/Frequency =
0.750000
FV = Future value =
$0
N = Total payment term x Frequency =
60
PV = Present value of Loan =
-$10,000.00
CPT > PMT = Payment =
$207.58
Alternate formula-based method:
PMT = Payment = |PV| x R% x (1+R%)^N / ((1+R%)^N - 1) =
$207.58
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