Avishek has an interest only loan for $100,000.00 maturing in 9 years. The interest rate on the loan is 4.750% compounded daily. He will repay the loan by making quarterly interest only payments, and by also making quarterly deposits of $2,319.62 into a sinking fund paying r(26) = 4.000%. If he defaults just after making 13 loan payments, and the lender gets the balance in the sinking fund, how much money is the lender's net loss?
Avishek has an interest only loan for $100,000.00 maturing in 9 years. The interest rate on the loan is 4.750% compounded daily. He will repay the loan by making quarterly interest only payments, and by also making quarterly deposits of $2,319.62 into a sinking fund paying r(26) = 4.000%. If he defaults just after making 13 loan payments, and the lender gets the balance in the sinking fund, how much money is the lender's net loss?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Avishek has an interest only loan for $100,000.00 maturing in 9 years. The interest rate on the loan is 4.750% compounded daily. He will repay the loan by making quarterly interest only payments, and by also making quarterly deposits of $2,319.62 into a sinking fund paying r(26) = 4.000%. If he defaults just after making 13 loan payments, and the lender gets the balance in the sinking fund, how much money is the lender's net loss?
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