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22 October, 13:24

You have just purchased a new warehouse. to finance the purchase, you've arranged for a 30-year mortgage loan for 80 percent of the $2,900,000 purchase price. the monthly payment on this loan will be $14,900. requirement 1: what is the apr on this loan?

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  1. 22 October, 13:45
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    We are asked to find the APR on this load.

    Given:

    Purchased price: $2,900,000

    Monthly payment: 14,900

    Amount borrowed: 0.80 ($2,900,000) = $2,320,000

    Using the PVA equation:

    PVA = $2,320,000 = $14,900 [{1-1 / (1+r) ]^360}/r]

    r = 0.560%

    APR is the monthly interest rate times the number in months of the year.

    APR = 12 (.560) = 6.72%
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Home » Business » You have just purchased a new warehouse. to finance the purchase, you've arranged for a 30-year mortgage loan for 80 percent of the $2,900,000 purchase price. the monthly payment on this loan will be $14,900.
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