BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Discount loan
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Interest-only loan
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Discount Decline loan
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Discount and Compound loan
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Detailed explanation-1: -Example 1: A $10, 000 loan with a 5-year term at 13% Annual Percentage Rate (APR) would be repayable in 60 monthly installments of $228 each.
Detailed explanation-2: -Divide your interest rate by the number of payments you’ll make that year. If you have a 6 percent interest rate and you make monthly payments, you would divide 0.06 by 12 to get 0.005. Multiply that number by your remaining loan balance to find out how much you’ll pay in interest that month.
Detailed explanation-3: -The formula and calculations are as follows: Effective annual interest rate = (1 + (nominal rate ÷ number of compounding periods)) ^ (number of compounding periods)-1. For investment A, this would be: 10.47% = (1 + (10% ÷ 12)) ^ 12-1.
Detailed explanation-4: -The principal–the money that you borrow. The interest–this is like paying rent on the money you borrow.