What would the firms monthly payments be

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Reference no: EM133377272

Question: Your employer is planning to start a new product line, including completely new operations. The upfront investment will be partly financed with a five-year term loan from a bank, in the amount of $2,500,000.00. This term loan will require fixed payments (either monthly or semi-annual [every six months]) until maturity. The loan officer believes that an EAR of 4.65% is appropriate. a. What would the firm's semi-annual payments be? b. What would the firm's monthly payments be? c. What total payments would the firm make over one year with either semi-annual or monthly payments? (Just add up the payments, ignore any time-value-of-money issues.) d. Compare your two answers to Question 2.c. Is one total larger than the other? Explain! (No need to calculate anything, explain in words.)

Reference no: EM133377272

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