7 You have just purchased a new warehouse. To finance the purchase, you?ve arran

Question

7 You have just purchased a new warehouse. To finance the purchase, you?ve arranged for a 32-year mortgage loan for 80 percent of the $3,320,000 purchase price. The monthly payment on this loan will be $16,500. Requirement 1: What is the APR on this loan? (Round your answer as directed, but do not use rounded numbers in intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) APR % Requirement 2: What is the EAR on this loan? (Round your answer as directed, but do not use rounded numbers in intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) EAR %

Explanation / Answer

APR monthly=RATE(384,-16500,2656000,)=.5438%

APR Per Annun =.5438*12=6.53%

EAR will be 6.53%

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