What is the equivalent annual cost in years

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Reference no: EM131972386

1. You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 31-year mortgage loan for 85 percent of the $3,310,000 purchase price. The monthly payment on this loan will be $16,400. What is the APR on this loan?

2. What is the equivalent annual cost in years 1 through 7 of a contract that has a first cost of $70,000 in year 0 and annual costs of $15,000 in years 3 through 7? Use an interest rate of 10% per year.

Reference no: EM131972386

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