You're Flora of Flora's Flowers. You borrowed $2.2 million from Big Bad Bank for 5 years beginning July 19 2020. The terms are 1-month LIBOR + 2.5%, amortization is 25% every July 19 beginning in 3 years. Which of the following is/are true?
a) Your loan matures July 19 2023
b) Your loan matures July 19 2025
c) You pay interest the 19th of every month (assuming it is a business day) until maturity
d) If 1-month LIBOR today is set at 1.25%, your interest rate will be 3.75% until maturity
e) At the loan's maturity, you will be paying $2,200,000 in principal
f) At the loan's maturity, you will be paying $1,100,000 in principal
Ans:
b) Your loan matures July 19 2025
c) You pay interest the 19th of every month (assuming it is a business day) until maturity
f) At the loan's maturity, you will be paying $1,100,000 in principal
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