Question

A loan of $100,000 is made today. The borrower will make equal repayments of $1231 per month with the first payment being exactly one month from today. The interest being charged on this loan is constant (but unknown). For the following two scenarios, calculate the interest rate being charged on this loan, expressed as a nominal annual rate compounding monthly. Give your answer as a percentage to 2 decimal places.

(a) The loan is fully repaid exactly after 180 monthly repayments, i.e., the loan outstanding immediately after 180 repayments is exactly 0.

(b) The term of the loan is unknown but it is known that the loan outstanding 2 years later equals to $77815.

Answer #1

**ANSWER IN THE IMAGE((YELLOW HIGHLIGHTED). FEEL FREE TO
ASK ANY DOUBTS. THUMBS UP PLEASE.**

Gerald has taken out a loan of $100,000 today to start a
business. He has agreed to repay the loan on the following
terms:
• Repayments will be made on a monthly basis. The first
repayment will be made exactly one month from today.
• The repayments for the first 5 years will cover interest
only to help reduce the financial burden for Gerald’s business at
the start.
• After the 5-year interest-only period, Gerald will make
level monthly payments...

Gerald has taken out a loan of $100,000 today to start a
business. He has agreed to repay the loan on the following
terms:
• Repayments will be made on a monthly basis. The first
repayment will be made exactly one month from today.
• The repayments for the first 5 years will cover interest only
to help reduce the financial burden for Gerald's business at the
start.
• After the 5-year interest-only period, Gerald will make level
monthly payments...

Gerald has taken out a loan of $100,000 today to start a
business. He has agreed to repay the loan on the following
terms:
• Repayments will be made on a monthly basis. The first
repayment will be made exactly one month from today.
• The repayments for the first 5 years will cover interest only
to help reduce the financial burden for Gerald’s business at the
start.
• After the 5-year interest-only period, Gerald will make level
monthly payments...

A loan of $1,000,000 is made today. The interest being charged
on this loan is 6% p.a. The borrower will make 30 level repayments
followed by a final smaller repayment (i.e., there are 31
repayments in total.). The first of the level repayments will occur
today, and each subsequent repayment (including the final smaller
repayment) will occur exactly 1 year after the previous repayment.
Explicitly, the final repayment will occur exactly 30 years from
today.
(a) Calculate the size of...

Today, Malorie takes out a 10-year loan of $200,000, with a
fixed interest rate of 5.7% per annum compounding monthly for the
first 3 years. Afterwards, the loan will revert to the market
interest rate.
Malorie will make monthly repayments over the next 10 years, the
first of which is exactly one month from today. The bank calculates
her current monthly repayments assuming the fixed interest rate of
5.7% will stay the same over the coming 10 years.
(a) Calculate...

Today, Malorie takes out a 10-year loan of $200,000, with a
fixed interest rate of 3.7% per annum compounding monthly for the
first 3 years. Afterwards, the loan will revert to the market
interest rate.
Malorie will make monthly repayments over the next 10 years, the
first of which is exactly one month from today. The bank calculates
her current monthly repayments assuming the fixed interest rate of
3.7% will stay the same over the coming 10 years.
(d) After...

A loan of 189,000 is going to be repaid by month-end repayments
of 4,000 starting in one month. The interest rate is 4.2% p.a.
compounded monthly. Calculate the loan outstanding balance at the
end of year 2. Correct your answer to the nearest cent without any
units. (Do not use "$" or "," in your answer. e.g. 12345.67)

A borrower has a 30-year fully amortizing mortgage loan for
$200,000 with an interest rate of 6% and monthly payments. If she
wants to pay off the loan after 8 years, what would be the
outstanding balance on the loan? (I know the correct answer would
be $175,545, but how to find the amount that goes in interest and
principal?)

A 100,000 loan is being repaid in 360 monthly installments at a
9% nominal annual interest rate compounded monthly. The first
payment is due at the end of the first month. Determine which
payment is the first where the amount of principal repaid exceeds
the amount of interest paid.
266th
267th
268th
269th
270th

Number of years= 20
Number of months=240
Annual Percentage Rate=8.00%
Monthly interest rate=0.67%
Loan amount=$441,747
Fixed monthly repayment amount=$ 3,694.95
1. The borrower actually had to pay $250 more each month due to
hidden fees and charges. Calculate the implied nominal interest
rate compounded monthly, the borrower is actually charged on the
loan taking into account these charges
2. Total amount of interest paid in the 3rd year?
3. The total principle paid in the 4th year?
4. The amount...

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