You have just purchased a new warehouse. to finance the purchase, you arranged for a 30-year mortgage loan for 65 percent of the

Question

4 years ago

11

You have just purchased a new warehouse. to finance the purchase, you arranged for a 30-year mortgage loan for 65 percent of the

$2.5 million purchase price. the monthly payment on this loan will be $10,400. what is the effective annual rate on this loan?

Mathematics

1 answer:

viva [34] · Answer 1 · 2021-12-21T16:24:24+03:00

viva [34]4 years ago

6 0

You are borrowing .65 * 2.5 million = $1,625,000
The loan payment formula can be solved for payment, years, amount borrowed but NOT for rate.
So, I used this calculator that will solve for rate http://www.1728.org/calcloan.htm and it says the rate is 6.62%