Happydesta
New member
- Joined
- Jan 25, 2007
- Messages
- 5
Here is my problem:
David obtained a $500,000 discounted housing loan at 7.58% interest rate for 15 years.
Calculate
a. The actual amount he received
b. The effective interest rate on the discounted loan.
P=dl-dl*r*t
P=500,000-(500,000*.0758*15)
P= 68,500
rs= r/1-r*t
rs=.0758/1-.0758*15
rs=.55
reff=(1+r/m)^m-1
reff=(1+.55/1)^1-1
reff=.55
Is this correct? It seems like the interest rate is really high. The discounted loans confuse me.
David obtained a $500,000 discounted housing loan at 7.58% interest rate for 15 years.
Calculate
a. The actual amount he received
b. The effective interest rate on the discounted loan.
P=dl-dl*r*t
P=500,000-(500,000*.0758*15)
P= 68,500
rs= r/1-r*t
rs=.0758/1-.0758*15
rs=.55
reff=(1+r/m)^m-1
reff=(1+.55/1)^1-1
reff=.55
Is this correct? It seems like the interest rate is really high. The discounted loans confuse me.