Question

Consider the following two loans for P=$12,000. Loan A: 5 year loan, annual interest rate of...

Consider the following two loans for P=$12,000.

Loan A: 5 year loan, annual interest rate of 5%.
Loan B: 3 year loan, annual interest rate of 8%.
Both loans are paid monthly. On which loan will you pay the least interest?
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Loan B has paid least interest.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Consider the following two loans for P=$12,000. Loan A: 5 year loan, annual interest rate of...
Consider the following two loans for P=$12,000. Loan A: 5 year loan, annual interest rate of 5%. Loan B: 3 year loan, annual interest rate of 8%. Both loans are paid monthly. On which loan will you pay the least interest?
Which of the following one-year, $1000 bank loans offers the lowest effective annual rate? a. A...
Which of the following one-year, $1000 bank loans offers the lowest effective annual rate? a. A loan with an APR of 6%, compounded monthly b. A loan with an APR of 6%, compounded annually, with a compensating balance requirement of 10% (on which no interest is paid) c. A loan with an APR of 6%, compounded annually, with a 1% loan origination fee
Given the following terms a loan amount of $1,200,000; annual rate of 5.33%; a 5 year...
Given the following terms a loan amount of $1,200,000; annual rate of 5.33%; a 5 year term with a future payoff balance of $60,000. Determine what's your a. monthly payment, b. interest portion of your payment in month 5, and c. principal payments paid in year 3
Two loans, both of an amount of 720,000 are repaid at a nominal interest rate of...
Two loans, both of an amount of 720,000 are repaid at a nominal interest rate of 19.2% convertible monthly. Loan 1 is to be repaid with 360 level monthly payments. Loan 2 is to be repaid by 360 monthly payments, each containing equal principal amounts and an interest amount based on the unpaid balance. Payments are made at the end of each month for both loans. The monthly payment for Loan 1 first exceeds the monthly payment for Loan 2...
Loan Amortization GIVEN: A $12,000 4-year loan at 5%. FIND for each year: a. Annual loan...
Loan Amortization GIVEN: A $12,000 4-year loan at 5%. FIND for each year: a. Annual loan payment b. Beginning-of-year balance .c. Annual interest d. Annual principal e. End-of-year balance
Which of the following is true when comparing two loans for the same amount of money...
Which of the following is true when comparing two loans for the same amount of money at the same interest rate for the same amount of time, but with different payment frequencies? Group of answer choices Annual payments are less than the total of a year's worth of monthly payments Total interest paid in a year for a loan with monthly payments is less than the total interest paid in a year for a loan with annual payments Total principal...
A local finance company quotes a 20% interest rate on a one year loan. If you...
A local finance company quotes a 20% interest rate on a one year loan. If you borrow $10,000, the interest for the year will be $2,000. Because you will pay a total of $12,000, the finance company requires that you pay $1,000 per month over the next 12 months with the first payment in one month. Is this a 20% loan? Find the effective annual interest rate on this loan.Find the annual interest rate compounded monthly.
Consider two loans with​ one-year maturities and identical face​ values: a(n) 7.6 % loan with a...
Consider two loans with​ one-year maturities and identical face​ values: a(n) 7.6 % loan with a 0.96 % loan origination fee and​ a(n) 7.6 % loan with a 5.1 % ​(no-interest) compensating balance requirement. What is the effective annual rate ​(EAR​) associated with each​ loan? Which loan would have the highest EAR and​ why? The EAR in the first case is nothing​%. ​(Round to one decimal​ place.) The EAR in the second case is nothing​%. ​(Round to one decimal​ place.)...
Consider a $75,000 mortgage loan with an annual interest rate of 4 percent. The loan term...
Consider a $75,000 mortgage loan with an annual interest rate of 4 percent. The loan term is seven years, but monthly payments will be based on a 30-year amortization schedule. What is the monthly payment? What will be the required balloon payment at the end of the loan term?
(B-8) Angela Montery has a five-year car loan for a Jeep Wrangler at an annual interest...
(B-8) Angela Montery has a five-year car loan for a Jeep Wrangler at an annual interest rate of 6.9% and a monthly payment of $599.50. After 3 years, Angela decides to purchase a new car. What is the payoff on Angela's loan? (C-9) You receive a 10-year subsidized student loan of $11,000 at an annual interest rate of 5%. What are your monthly loan payments for this loan when you graduate?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT