A small business owner visits his bank to ask for a loan. The owner states that
ID: 2784283 • Letter: A
Question
A small business owner visits his bank to ask for a loan. The owner states that he can repay a loan at $2,400 per month for the next three years and then $1,400 per month for two years after that. If the bank is charging customers 10.75 percent APR, how much would it be willing to lend the business owner? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
A small business owner visits his bank to ask for a loan. The owner states that he can repay a loan at $2,400 per month for the next three years and then $1,400 per month for two years after that. If the bank is charging customers 10.75 percent APR, how much would it be willing to lend the business owner? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Explanation / Answer
how much would it be willing to lend the business owner
=(2400*((1-(1+(10.75%/12))^(-3*12))/(10.75%/12)))+((1400*((1-(1+(10.75%/12))^(-2*12))/(10.75%/12))))/(1+(10.75%/12))^(3*12)
=95416.60
the above is the answer