Which loan would give you with most upfront money when loan

Reference no: EM13451655

The following three one-year "discount" loans are available to you:

Loan A: $120,000 at a 7 percent discount rate

Loan B: $110,000 at a 6 percent discount rate

Loan C: $130,000 at a 6.5 percent discount rate

a. Determine the dollar amount of interest you would pay on each loan and indicate the amount of net proceeds each loan would provide. Which loan would provide you with the most upfront money when the loan takes place?

b. Calculate the percent interest rate or effective cost of each loan. Which one has the lowest cost?

Reference no: EM13451655

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