You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 25-year mortgage for 75 percent of the $4,200,000 purchase price. The monthly payment on this loan will be $18,300. What is the APR on this loan? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
The question requires us to find the APR on the loan. APR is the Annual percentage rate. It is basically the amount charged for borrowing (a loan) or amount made by investing (an investment).
This question is an example of an annuity. Annuities are defined as a series of fixed payments made by you or made to you over a fixed period of time. The common payment periods are yearly, semi-annually, quarterly or monthly.
This question is a typical case of present value...
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