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- Calculating interest and APR of installment loan. Assuming that interest is the only finance charge, how much interest would be paid on a 5,000 installment loan to be repaid in 36 monthly installments of 166.10? What is the APR on this loan?A borrower has two alternatives for a loan: (1) issue a $390,000, 120-day, 8% note or (2) issue a $390,000, 120-day note that the creditor discounts at 8%. Assume a 360-day year. a. Compute the amount of the interest expense for each option.fill in the blank 1 of 1$ for each alternative. b. Determine the proceeds received by the borrower in each situation. Line Item Description Amount (1) $390,000, 120-day, 8% interest-bearing note $fill in the blank 2 (2) $390,000, 120-day note discounted at 8% $fill in the blank 3What is the difference in interest paid between a 30-year mortgage loan and a 15-year mortgage loan both of $72700 if the annual interest rate is 5% a. $27262.50 b. $54525.00 c. $37012.40 d. $10348.38
- Evaluating Alternative Notes A borrower has two alternatives for a loan: (1) issue a $660,000, 120-day, 6% note or (2) issue a $660,000, 120-day note that the creditor discounts at 6%. Assume a 360-day year. a. Calculate the amount of the interest expense for each option.$fill in the blank 1 for each alternative. b. Determine the proceeds received by the borrower in each situation. (1) $660,000, 120-day, 6% interest-bearing note $fill in the blank 2 (2) $660,000, 120-day note discounted at 6% $fill in the blank 3 c. Alternative is more favorable to the borrower because the borrower .Evaluating Alternative Notes A borrower has two alternatives for a loan: (1) issue a $360,000, 60-day, 5% note or (2) issue a $360,000, 60-day note that the creditor discounts at 5%. Assume a 360-day year. a. Calculate the amount of the interest expense for each option. $fill in the blank 1 for each alternative. b. Determine the proceeds received by the borrower in each situation. (1) $360,000, 60-day, 5% simple-interest $fill in the blank 2 (2) $360,000, 60-day note discounted at 5% $fill in the blank 3 c. Alternative is more favorable to the borrower since the effective interest rate on alternative 1 is and the effective rate on alternative 2 is .A borrower has two alternatives for a loan: (1) issue a $480,000, 60-day, 8% note or (2) issue a $480,000, 60-day note that the creditor discounts at 8%. (Assume a 360-day year is used for interest calculations.) Required: a. Calculate the amount of the interest expense for each option.$fill in the blank 1 for alternative (1)$fill in the blank 2 for alternative (2) b. Determine the proceeds received by the borrower in each situation. Alternative 1 $fill in the blank 3 proceeds Alternative 2 $fill in the blank 4 proceeds
- Evaluating Alternative Notes A borrower has two alternatives for a loan: (1) issue a $360,000, 60-day, 5% note or (2) issue a $360,000, 60-day note that the creditor discounts at 5%. Assume a 360-day year. a. Compute the amount of the interest expense for each option.$ for each alternative .b. Determine the proceeds received by the borrower in each situation (1) $360,000, 60-day, 5% simple-interest $ (2) $360,000, 60-day note discounted at 5%asssuming that the interest is the only finance charge, how much interest would be paid on 5,000 installment loan to be repaid in 36 moonthly installment 166.10? what is the apr on this loan?2. A mortgage has the following terms: Amount: $750,000 Rate: 6.25% Amortization (Years): 30 Term (Years): 20 Please determine the following: A. What is the Monthly Payment? B. In preparing an Income Statement, what is the Interest Expense for years 1-5? C. What is the Principal Balance at the end of year 6? D. What is the value of the loan at the expiration? E. If rates remain constant (flat), what would the benefit be to refinance this loan after year 10?
- Evaluating alternative notes A borrower has two alternatives for a loan: (1) issue a $510,000, 120-day, 9% note or (2) issue a $510,000, 120-day note that the creditor discounts at 9%. Assume a 360-day year. a. Compute the amount of the interest expense for each option. for each alternative. b. Determine the proceeds received by the borrower in each situation. (1) $510,000, 120-day, 9% Interest-bearing note (2) $510,000, 120-day note discounted at 9% c. Alternative. ) is more favorable to the borrower because the borrowerAssume that a borrower is expected to prepay a loan at the end of Year 5. Based on the following loan information on the fully-amortized fixed rate mortgage what is the effective cost of borrowing of Loan C? (choose the closest answer) Financial Calculator 1: Financial Calculator 2 Loan Amount Maturity Contract interest rate Upfront fees Upfront mortgage Insurance fee Prepayment after Year Effective Cost of Borrowing 86.79 7AN Loan C $200,000 30 years 6.25% 3% 1.6% 5 Quiz Score: 8 oA borrower has two alternatives for a loan: (1) issue a $300,000, 120-day, 8% note or (2) issue a $300,000, 120-day note that the creditor discounts at 8%. Assume a 360-day year. a. Calculate the amount of the interest expense for each option.$ for each alternative. b. Determine the proceeds received by the borrower in each situation. (1) $300,000, 120-day, 8% interest-bearing note $ (2) $300,000, 120-day note discounted at 8% $ c. Alternative is more favorable to the borrower because the borrower .