Bea Fehr requires a personal loan to purchase appliances that cost S5000. She meets with the loan officers of two financial institutions. Institution A offers her a fixed interest rate Of 9 ¾% for a three-year loan; Institution B offers her a fixed interest rate of 11 ½ % for a three-year loan. How much will pay Institution A each month? How much will Bea pay Institution B each month? With which financial institution will Bea pay more each month? How much more will she pay? What is the difference in interest over the three years between the two financial institutions?
Bea Fehr requires a personal loan to purchase appliances that cost S5000. She meets with the loan officers of two financial institutions. Institution A offers her a fixed interest rate Of 9 ¾% for a three-year loan; Institution B offers her a fixed interest rate of 11 ½ % for a three-year loan. How much will pay Institution A each month? How much will Bea pay Institution B each month? With which financial institution will Bea pay more each month? How much more will she pay? What is the difference in interest over the three years between the two financial institutions?
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 25PROB
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1. Bea Fehr requires a personal loan to purchase appliances that cost S5000. She meets with the loan officers of two financial institutions. Institution A offers her a fixed interest rate Of 9 ¾% for a three-year loan; Institution B offers her a fixed interest rate of 11 ½ % for a three-year loan.
How much will pay Institution A each month?
How much will Bea pay Institution B each month?
With which financial institution will Bea pay more each month? How much more will she pay?
What is the difference in interest over the three years between the two financial institutions?
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