Question

You have purchased a new warehouse. To finance the purchase, you’ve arranged for a 25-year mortgage for 75 percent of the $4,200,000 purchase price. The monthly payment on this loan will be $18,300.

What is the APR on this loan? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Answer 1

\begin{aligned}Payment=183000\\ \cos t=4200000\cdot 0,75\% =3150000=c\\ Payment=C\dfrac {\left( 1+i\right) ^{n}\cdot i}{\left( 1+i\right) ^{n}-1}\\ n=25years\times \dfrac {12manths}{1year}=300months\\ 18300=3150000\cdot \dfrac {\left( 1+i\right) ^{300}\cdot i}{\left( 1+i\right) ^{300}\cdot i}\\ i=0,0041\\ i is the monhly interest_{i}\\ i\times 12months=APR\\ APR=0,0123=1,23%\end{aligned}