Your boss at work is known as a one-solution-fits-all problems type manager. This approach to problem solving is most characteri
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Answer:
Explanation:
Except for other fees or interests that you might owe, the<em> payoff </em>should be equal to the debt balance. Then, assuming no other fees or interests that you might owe, you just must calculate the balance of your debt after 112 payments (11 years, not 8).
There is a very important formula to calculate the outsdanging balance of a loan, whithout calculating the complete sheet of all the monthly payments:
Where:
- balance is the outstanding balance after m months
- r i s the fixed monthly rate: 10.5%/12 = 0.105/12
- n is the number of total months of the loan: 30years × 12month/year = 360 months
- m: 112
Answer: 16.08%
Explanation:
The effective annual interest rate simply means the interest rate on a loan that is restated from nominal interest rate.
In the above question, we are informed that it uses 15.00% as the nominal annual rate make monthly payments.
Effective annual rate = (1 + r/m)^m - 1
where,
r = annual nominal interest rate
m = number of compounding periods for the year.
In this case m= 12 since there are 12 months in a year.
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