Problem #2: You have taken a loan of $244,000. You can afford to pay monthly payments of $1921.13. This loan will be repaid in 20 years. Problem #2: What is the nominal annual rate of interest charged on this loan? Answer as a percentage, correct to 2 decimals

Problem #2: You have taken a loan of $244,000. You can afford to pay monthly payments of $1921.13. This loan will be repaid in 20 years. Problem #2: What is the nominal annual rate of interest charged on this loan? Answer as a percentage, correct to 2 decimals

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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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

I submitted this question before but the wrong values were inputted for the solution given. Remember to put 244000 for the loan value in excel.

Problem #2: You have taken a loan of $244,000. You can afford to pay monthly payments of $1921.13. This loan will be repaid
in 20 years.
Problem #2:
What is the nominal annual rate of interest charged on this loan?
Answer as a percentage,
correct to 2 decimals

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