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Annual payments / EAR

You have been approved for a $70,000 loan toward the purchase of a new home at 10% interest. The mortgage is for 30 years. How much are the approximately annual payments of the loan? Hint: Assume you pay yearly.
None of the above

First Choice Bank pays 9% APR compounded quarterly on its business loans. National Emerald Bank pays 16% APR compounded daily. The EAR for First Choice and National Emerald Bank are:
9.31% and 17.35%, respectively
9% and 17.50%, respectively
9.31% and 17.50%, respectively
9% and 17.35%, respectively

Solution Preview

The annual payments would be such that the present value of payments is equal to the loan amount. Since the payments ...

Solution Summary

The solution explains how to determine the annual payments on a loan and the EAR