JPY Inc borrowed $705,000 for 30 years at a rate of 4.68% APR compounded monthly, with first payment due one-month from today. What is the equal monthly payment on this loan? A) 3697.98 B) 3673.85 C) 3647.93 D) 3620.19

JPY Inc borrowed $705,000 for 30 years at a rate of 4.68% APR compounded monthly, with first payment due one-month from today. What is the equal monthly payment on this loan? A) 3697.98 B) 3673.85 C) 3647.93 D) 3620.19

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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Concept explainers

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.

Question

JPY Inc borrowed $705,000 for 30 years at a rate of 4.68% APR compounded monthly, with first payment due one-month from today. What is the equal monthly payment on this loan?

A) 3697.98

B) 3673.85

C) 3647.93

D) 3620.19

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