Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. a foreign investor borrowed $36 million for the ac

A foreign investor borrowed $36 million for the acquisition of a 180,000 square foot shopping center...

70.2K

Verified Solution

Question

Finance

A foreign investor borrowed $36 million for the acquisition of a180,000 square foot shopping center in Boulder, Colorado at apurchase price of $54 million. The mortgage loan was a 30-yearfully amortizing fixed rate loan at a stated annual interest rateof 5% payable monthly and the borrower was charged 2 points by thelender at closing.

What was the effective annual interest rate on the loan if theloan was carried to maturity?

What was the effective annual interest rate on the loan if theprincipal balance was fully repaid at the end of 10 years?

Answer & Explanation Solved by verified expert
3.7 Ratings (508 Votes)
All fianncials below are in mn Payment frequency is monthly Hence one period is one month We will use the RATE function to calculate the effective rate per period We will then convert    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

A foreign investor borrowed $36 million for the acquisition of a180,000 square foot shopping center in Boulder, Colorado at apurchase price of $54 million. The mortgage loan was a 30-yearfully amortizing fixed rate loan at a stated annual interest rateof 5% payable monthly and the borrower was charged 2 points by thelender at closing.What was the effective annual interest rate on the loan if theloan was carried to maturity?What was the effective annual interest rate on the loan if theprincipal balance was fully repaid at the end of 10 years?

Other questions asked by students

Q

. What are some of the main nutritional concerns facing a vegetarian athlete? Do you think...

Biology
Q

Prediction the phenotype of lambda phage-infected bacteria conferred by the mutations described in the following. Explain...

Biology
Q

During the first half of the semester we’ve often discussed the importance and cited examples of...

Accounting
Q

If mKI 63 and m KAI 139 find mGL K L A I Answer mGL

Basic Math
Q

A bacteria culture grows with constant relative growth rate. The bacteria count was 1,920 after...

Basic Math
Q

Find the equations of the two tangent lines to the graph of f that pass...

Calculus
Q

The accountant of Splish Shoe Co. has compiled...

Accounting
Q

discuss emerging issues in cost and management accounting

Accounting
Q

what have i missed that its not complete? ...

Accounting
Q

The Elston Model, Inc. opened for business on May 1, 2008. Its trial balance before...

Accounting
Q

Please answer req 6-9!! will rate Req6 drop down options: 1. a. Average b....

Accounting
Q

Gelb Company currently manufactures 41,000 units per year of a key component for its manufacturing...

Accounting