Question

you want to borrow $89000 from your local bank to buy a new sailboat. You can afford to make monthly payments of $1850, but no more. Assuming monthly compounding, what is the highest rate you can afford on a 60 month APR loan?

Answer 1

9.06%

Step-by-step explanation:

Given that :

The amount to be borrowed = $89000

Monthly payment PMT = $1850

Period = 60 month

The highest rate that can be afforded on the 60 month APR loan is determined by using the EXCEL Spreadsheet to compute the solution to this question. The spreadsheet screenshot can be seen below for better understanding.