You are looking at a one-year loan of $10,000. The Interest rate is quoted as 9.7 percent plus two points. A point on a loan is 1 percent (one percentage point) of the loan amount. Quotes similar to this one are common with home mortgages. The Interest rate quotation in this example requires the borrower to pay two points to the lender up front and repay the loan later with 9.7 percent interest. What rate would you actually be paying here? Note: Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.

You are looking at a one-year loan of $10,000. The Interest rate is quoted as 9.7 percent plus two points. A point on a loan is 1 percent (one percentage point) of the loan amount. Quotes similar to this one are common with home mortgages. The Interest rate quotation in this example requires the borrower to pay two points to the lender up front and repay the loan later with 9.7 percent interest. What rate would you actually be paying here? Note: Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 14P

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Similar questions

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