   Chapter 5, Problem 17P Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
ISBN: 9781337395250

Solutions

Chapter
Section Fundamentals of Financial Manageme...

15th Edition
Eugene F. Brigham + 1 other
ISBN: 9781337395250
Textbook Problem

EFFECTIVE INTEREST RATE You borrow \$230,000; the annual loan payments are \$20,430.31 for 30 years. What interest rate are you being charged?

Summary Introduction

To calculate: Interest rate charged.

Introduction:

Interest Rate:

Interest rate is an amount of money which a lender charges from the borrower to lend the money for borrowers use. The interest rate as well as the term interest varies as per the terms of agreement between the lender and the borrower. The best example of interest rate is the amount which is earned from bank on depositing the money.

Explanation

Compute rate of interest with the help of “RATE” function of spreadsheet.

Given,

Borrowed money is \$230,000.

Annual payment is \$20,430.31...

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