To repay a $2,000 loan from your bank, you promise to make equal payments every six months for the next five years totaling $3,116.20. What annual rate of interest will you be paying?
What will be an ideal response?
Answer: Using a financial calculator, N=10, i=10, PV=0, FV=4000, solve for PMT=-250.98
Annual interest rate = (.09)(2) = .18 = 18%
Business
You might also like to view...
On a statement of cash flows, which is NOT considered a financing activity?
A) paid income taxes B) proceeds from long-term debt C) repayment of long-term debt D) paid dividends
Business
What is the estimated total labor costs at Divaxo Company when 11,000 labor-hours are used?
A) $51,944 B) $58,750 C) $56,270 D) $52,042
Business