Moneybag Bank & Trust is offering loans at 5% compounded continuously. Before you decide to borrow using that interest rate, what payment would be required on a $200,000 loan for a 30 year loan?
A) $1,089.59
B) $1,578.34
C) $1,183.92
D) $1,226.90

Question

Quizplus · Accepted Answer

Solution:
Effective interest is 5.13%
Solution using a calculator:
N = 30 * 12
I = 5.14 / 12
PV = -200000
Solve for pmt.

Moneybag Bank & Trust Is Offering Loans at 5% Compounded