Question

How much would a bank be willing to loan if the borrower offered terms of repaying...

How much would a bank be willing to loan if the borrower offered terms of repaying $10,000 every three year for 36 years (i.e. first payment 3 years from today, the second payment is received 6 years from today, etc.) and the relevant rate of interest is 7% compounded annually?

Homework Answers

Answer #1

Hence, Loan amount is $40,546.23 or $40,546

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
How much would a bank be willing to loan if the borrower offered terms of repaying...
How much would a bank be willing to loan if the borrower offered terms of repaying $1,000 every six months for 40 years (i.e. first payment is made 6 months from today, the second payment is made one year from today, etc.) and the relevant rate of interest is 5% APR, compounded semiannually?
You are considering making a loan at the bank. You will borrow $10,000 from the bank...
You are considering making a loan at the bank. You will borrow $10,000 from the bank today. The interest rate on the loan is 5 percent nominal compounded annually. You will completely pay off the loan with two equal payments. The first payment is due one year from today, and the second payment is due two years from today. Your loan payments will be $5378.05 each. How much will your loan balance be after you make the first payment? A....
Moderate Bank granted a loan to a borrower on January 1, 2019. The interest on the...
Moderate Bank granted a loan to a borrower on January 1, 2019. The interest on the loan is 10% payable annually starting December 31, 2019. The loan matures in three years on December 31, 2021. After considering the origination fee received from the borrower and the direct origination cost incurred, the effective rate on the loan is 12%. Principal amount 5,000,000 Direct origination cost incurred 100,000 Origination fee received from the borrower 340,000 Indirect origination cost incurred 50,000 What is...
A borrower borrows on a five year loan $5,000 from a bank at 10% and will...
A borrower borrows on a five year loan $5,000 from a bank at 10% and will pay back the loan in five equal $ payments (annually) at the end of each time period. How much is each equal payment, how much principal and interest is paid back, and how much interest is paid back?  
How much would you be willing to pay today for an ordinary annuity that makes equal...
How much would you be willing to pay today for an ordinary annuity that makes equal annual payments of $3,000 each year. You will receive your first payment 7 years from today and you will receive your last payment 32 years from today. The interest rate on this annuity is 4.1%
-You have offered your friend a $15,000 loan with 7% simple interest per year for 8...
-You have offered your friend a $15,000 loan with 7% simple interest per year for 8 years. How much interest will you earn on the loan? -You are earning interest on money in your bank account at a rate of 4% compounded annually. If you deposit $7,000 in the account for 7 years, how much ineterst will you earn? -You need $21000 to purchase a really sweet Honda Civic. You negotiate a loan with the bank of Mom and Pop...
Liz received a $35,850 loan from a bank that was charging interest at 5.50% compounded semi-annually....
Liz received a $35,850 loan from a bank that was charging interest at 5.50% compounded semi-annually. a. How much does she need to pay at the end of every 6 months to settle the loan in 5 years? Round to the nearest cent b. What was the amount of interest charged on the loan over the 5-year period? Round to the nearest cent
Lionel received a $33,950 loan from a bank that was charging interest at 4.50% compounded semi-annually....
Lionel received a $33,950 loan from a bank that was charging interest at 4.50% compounded semi-annually. a. How much does he need to pay at the end of every 6 months to settle the loan in 4 years? Round to the nearest cent b. What was the amount of interest charged on the loan over the 4-year period? Round to the nearest cent
Assume that today you borrow $25,000 from your local bank. The stated interest rate is 10%,...
Assume that today you borrow $25,000 from your local bank. The stated interest rate is 10%, compounded annually. It will be a 5 year loan. You will pay back the loan at the end of each of the next five years. Part A) What will be your annual payment be for the next five years. Part B) How much of your first payment is going toward interest? Part C) What is the outstanding principle balance after you make the first...
Today you borrow $25,000 from your local bank. The stated interest rate is 10%, compounded annually....
Today you borrow $25,000 from your local bank. The stated interest rate is 10%, compounded annually. It will be a 5 year loan. You will pay back the loan at the end of each of the next five years. A) What will be your annual payment be for the next five years.    B) How much of your first payment is going toward interest? C) What is the outstanding principle balance after you make the first payment? D) How much...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT