What are the interest payments on a $200 loan if the contractual rate is 12%, th
ID: 2761510 • Letter: W
Question
What are the interest payments on a $200 loan if the contractual rate is 12%, the loan will be paid back in four uniform interest and principal payments at the end of the next four years, and the remaining balance method of calculating interest will be used (fully amortized)? What is the actuarial, annual percentage, and the effective interest rate? (AIR, APR, ie =12%)
What is the annual loan payment?
$68.8
$58.8
$7.1
$46.9
None of the above
What is the loan balance at the end of the third year?
$68.8
$58.8
$7.1
$46.9
None of the above
What is the interest payment in the fourth year?
$68.8
$58.8
$7.1
$46.9
None of the above
What is the principal payment in the second year?
$68.8
$58.8
$7.1
$46.9
None of the above
What is the actuarial rate?
12%
12.5%
3%
13.3%
None of the above
Explanation / Answer
ANS;
1) $68.8
2) $46.9
3) $46.9
4) $46.9
5) 13.3%
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