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Borrower will make equal repayments

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A loan of $300,000 is made today. The borrower will make equal repayments of $1478525 per quarter with the first payment being exactly 3 months from today. The interest being charged on this loan is constant (but unknown).

For the following two scenarios, calculate the interest rate being charged on this loan, expressed as an effective annual rate in percentage:

(a) The loan is fully repaid exactly after 36 quarterly repayments, i.e., the loan outstanding immediately after 36 repayments is exactly 0.

(b) The term of the loan is unknown but it is known that the loan outstanding 5 years later equals to $69183.13.

Reference no: EM132386119

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