A which of the following loans pays off soonerloan 1 175000, Ask an Expert

Finance

a. Which of the following loans pays off sooner?

Loan 1: $175,000; 8% annual interest; 30 years (monthly PMT), with an extra $375 per month in principle payment.

Loan 2: $175,000; 7% annual interest; 15 years (monthly PMT)

b. How much TOTAL (principle and interest) will be paid over the life of the following loan: $185,000 loan; 7% annual interest (monthly payments); 30 years?

c. For a loan of $160,000 at 7% annual interest, monthly payments, for 30 years, how much total interest will be paid over the life of the loan?

2. According to this theory, if nominal interest rate in Canada is 6% higher than it is in Japan, then the inflation rate in Canada is likely to be 6% higher as well.

a) International Fisher Effect

b) Purchasing Power Parity (The Law of One Price)

c) Purchasing Power Parity (relative version)

d) Interest Rate Parity

e) Generalized Fisher Effect

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92706762

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