Draw cash flow diagram for loan and calculate interest rate


Problem

Gather information on a loan for which the true cost (measured as an interest rate) does not match the stated interest rate of the loan. Common reasons include origination fees, a difference between the cash price and the loan price, and interest costs that are paid by the government rather than the borrower.

(a) Draw a cash flow diagram for this loan and calculate the interest rate.

(b) Prepare a one-page presentation to describe this to the class.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Microeconomics: Draw cash flow diagram for loan and calculate interest rate
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