Question

Joe is taking an amortized loan for 85,000 to open a small business, and it's deciding between the offers if two lenders. He wants to know which one would be the better deal over the life of the small business loan, and by how much. a) His credit union had offered him a 9- year small business loan at an annual interest rate of 14.4% find the monthly payment $_b) a bank has offered him a 10-year small business loan at an annual interest rate of 12.8% find the monthly payment c) suppose Joe pays the monthly payment each month for the full term. which lender small business loan would have the lowest total amount to pay off, and how much? Credit UnionThe total amount paid would be $ less than the bank. BankThe total amount paid would be $ less than the credit union.

Answer 1

`\begin{gathered} a) \\ t=\text{time = 9 years} \\ i=interest=14.4\text{ per cent annual =0.144} \\ monthly\text{ payment =}(loan\cdot i\cdot t)/(12) \\ monthly\text{ payment =}(85,000\cdot0.144\cdot9)/(12) \\ monthly\text{ payment =55,080} \\ \end{gathered}`