Garret just closed a new loan on his 4-unit apartment as follows: Initial loan amount, $1,000,000, 4% interest, 10-year term, 30-year amortization, and there was a 2% loan fee paid at closing. What is the monthly payment? What will the loan balance by when the loan matures? What is the balance at the end of year 5? What is the effective interest rate if Garret holds the note until maturity? What if he pays it off at the end of year 5? What is the total interest paid if the loan is held to maturity?

Garret just closed a new loan on his 4-unit apartment as follows: Initial loan amount, $1,000,000, 4% interest, 10-year term, 30-year amortization, and there was a 2% loan fee paid at closing. What is the monthly payment? What will the loan balance by when the loan matures? What is the balance at the end of year 5? What is the effective interest rate if Garret holds the note until maturity? What if he pays it off at the end of year 5? What is the total interest paid if the loan is held to maturity?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 25PROB

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