-
+1 - 312-224-1615
Get in touch with us
-
support@helpwithassignment.com
Send us an e-mail
Solution Library
Calculation of Effective Interest Rate for Loan Repayment
Question
You and your partner want to buy a house
City Bank will give you a $200,000 loan for 20 years. They will charge you 5% concessional interest for the first year, after which the loan reverts to their normal variable rate, which is currently 8.75%. They will also charge you a $600 application fee, plus when you make your loan enquiry you can have as much coffee as you can drink.
The Republic Bank will also give you a $200,000 loan for 20 years, but their concessional interest rate for the first year is 6.75%, after which the loan reverts to their normal variable rate, which is also 8.75%. However, there is no fee and no coffee.
Both banks compound interest daily and you will make your loan payments fortnightly. Assume there are 26 fortnights per year (520 over 20 years), and banks use a 365-day year to calculate the interest charge.
a. What would your fortnightly loan payment be for each bank?
b. Assuming you can drink $5 worth of coffee, which bank offers the best deal
Summary
The question belongs to Finance and it discusses about effective interest concepts and
Total Word Count 178
Download Full Solution
WHAT OUR STUDENTS SAY
I used to get really confused with the acid-based reactions and alkaline reactions when I approached HwA. From there onwards, I took regular help and got enormous benefits.
Debbie Farrow Student
I was looking for help writing my case study on Stock Valuation. The case study needed specific stock valuation analysis work and I needed someone with good hold on the subject to write the case study analysis. At HwA I was paired with a finance assignment expert who had extensive industry experience. The quality of the assignment was absolutely brilliant and helped me score an A.
Tim Branagh Student
I was a bad place with my electricity assignment and was not sure how to apply the laws to get the numerical assignments done. Then I came in contact of one of my seniors in my college who told me about HwA. The service I got here was awesome and more than giving me a A in my assignment they also treated me with respect and helped me learn a lot.
Nicola Watson Student
I often used to get baffled by the Theory X and Theory Y of management strategies when my friend told me to seek help from HwA. It was a great advice, I must say, because it helped me to get good grades and clear my concepts.
Laurie Butters Student
I was having a difficult time understanding the laws of conservation of mass and energy and use of tie components. With the brilliant tutors at TheReliableTutor I now have a much clearer understanding of the concepts. Their timely and professional tutoring with my chemical engineering assignments has helped me improve my grades and I am very satisfied with the way they provide their services
Walter Mehigan Student
Comments
this is a very good website
I have 50 questions for the same test your page is showing only 28
hi can you please help or guide me to answer my assignments. thanks
hi can anyone help or guide me to my assignments. thanks
This solution is perfect ...thanks
Hello Allison,I love the 2nd image that you did! I also, had never heard of SumoPaint, is something that I will have to exolpre a bit! I understand completely the 52 (or so) youtube videos that you probably watched. Sometimes they have what you want, sometimes they don't! However, it is always satisfying when you are able to produce something that you have taught yourself. Great job!Debra 0 likes
Perfect bank of solution.
great !
thanks for the quick response. the solution looks good. :)
thnx for the answer. it was perfect. just the way i wanted it.
works fine.