Sam takes out a loan for $3,685.50. The term of the loan is 7 years, and she will make bi-weekly payments. The interest rate on the loan is 3.475% compounded monthly. a) What is the effective interest rate per payment period? b) If Sam is going to repay the loan with level payments, what is the monthly payment amount? c) Fill in the first 3 rows of the loan amortization table. d) What would the nominal interest rate (compounded monthly) have to be if the bi-weekly (level) payment amounts were $24.69?
Sam takes out a loan for $3,685.50. The term of the loan is 7 years, and she will make bi-weekly payments. The interest rate on the loan is 3.475% compounded monthly. a) What is the effective interest rate per payment period? b) If Sam is going to repay the loan with level payments, what is the monthly payment amount? c) Fill in the first 3 rows of the loan amortization table. d) What would the nominal interest rate (compounded monthly) have to be if the bi-weekly (level) payment amounts were $24.69?
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 17P
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Sam takes out a loan for $3,685.50. The term of the loan is 7 years, and she will make bi-weekly payments. The interest rate on the loan is 3.475% compounded monthly.
a) What is the effective interest rate per payment period?
b) If Sam is going to repay the loan with level payments, what is the monthly payment amount?
c) Fill in the first 3 rows of the loan amortization table.
d) What would the nominal interest rate (compounded monthly) have to be if the bi-weekly (level) payment amounts were $24.69?
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