What is the effective monthly interest rate of the loan

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Questions: Helen takes a loan of $50,000 from a bank at a nominal interest rate of 9% per year compounded monthly. The loan is to be repaid in 3 years with 36 equal end-of-month equal payments.

(a) What is the effective monthly interest rate of the loan?

(b) What is the effective annual interest rate of the loan?

(d) Helen has just made the payment to the Bank. How much does she still owe the bank?

(e) Helen has just made the payment to the Bank. Having gotten richer recently, she wishes to fully settle the loan with just 6 more monthly payments instead of the original 24 more payments. How much is the new monthly payment assuming that there is no change in the interest rate charged by the bank?

(f) Suppose that right at the start of the loan, Helen could only afford to pay $1,038 a month. how many months would she need to pay back the loan?

Reference no: EM133363845

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