b. What is the balance of the loan at the end of year 3?Round to the nearest centc. By how much will the amortization period shorten if Jason makes an extra paymentof $30,000 at the end of year 3?kyearsmonths Jason received a 30 year loan of $290,000 to purchase a house. The interest rate onthe loan was 2.80% compounded semi-annually.a. What is the size of the monthly loan payment?Round to the nearest centb. What is the balance of the loan at the end of year 3?

The amount of loan is $290,000 The interest rate is 2.80% Compounded semi-annually The time period…

Jason received a 30 year loan of $290,000 to purchase a house. The interest rate on the loan was 2.80% compounded semi-annually. a. What is the size of the monthly loan payment? Round to the nearest cent b. What is the balance of the loan at the end of year 3?

Jason received a 30 year loan of $290,000 to purchase a house. The interest rate on the loan was 2.80% compounded semi-annually. a. What is the size of the monthly loan payment? Round to the nearest cent b. What is the balance of the loan at the end of year 3?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 2P: Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for...

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

b. What is the balance of the loan at the end of year 3?
Round to the nearest cent
c. By how much will the amortization period shorten if Jason makes an extra payment
of $30,000 at the end of year 3?
k
years
months

Jason received a 30 year loan of $290,000 to purchase a house. The interest rate on
the loan was 2.80% compounded semi-annually.
a. What is the size of the monthly loan payment?
Round to the nearest cent
b. What is the balance of the loan at the end of year 3?

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Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for 15,000 with a nominal interest rate of 11%. However, this is an installment loan, so the bank also charges add-on interest. Mary must make monthly payments on the loan, and the loan is to be repaid in 1 year. What is the effective annual rate on the loan (assuming a 365-day year)?