What is the nominal annual rate compounded monthly

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Leo has a car loan with 4 years left. The outstanding balance on the loan is $30000 and his monthly payments (at the end of each month) are $738.03.

a) What is the nominal annual rate compounded monthly for the loan?  

b) If the nominal annual rate compounded monthly changes to 6.001000000000001% what is the Present Value of his current payments?

c) If his lender will allow him to renegotiate the terms of the loan to the new lower interest rate, but charges him a (3 month's interest rate) penalty of: 3 * (original monthlyRate) * Outstanding Balance, how much is the penalty?

d) What would his new payments be? (The penalty from part c) is added to the Outstanding Balance.)

e) (T/F) He should refinance.

True

False

f) If his lender charges him a (Interest Rate Differential) penalty of (originalRate - newRate) * Outstanding Balance * (Number of Payments Remaining), how much is the penalty?

g) (T/F) He should refinance.

True

False

Reference no: EM132601961

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