CBA Offer Principal $10,000 with terms of 3 years Interest rate 7.2% pa compounding monthly, principal and interest loan Payment is made by the end of each month NAB offer Principal $10,000 with a term of 3 years Interest rate 7.3% pa compounding quarterly, interest loan only Payment is made every 3 months with the principal paid by the end of year a. Which loan has higher periodic payment and why? b. Which loan has higher total interest expense over term loan? c. To make your own decision, which factors are critical in consideration? Please show in EXCEL.

CBA Offer Principal $10,000 with terms of 3 years Interest rate 7.2% pa compounding monthly, principal and interest loan Payment is made by the end of each month NAB offer Principal $10,000 with a term of 3 years Interest rate 7.3% pa compounding quarterly, interest loan only Payment is made every 3 months with the principal paid by the end of year a. Which loan has higher periodic payment and why? b. Which loan has higher total interest expense over term loan? c. To make your own decision, which factors are critical in consideration? Please show in EXCEL.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 20P

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