Jade mara needs to find the effective cost of the following, Finance Basics

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Jade mara needs to find the effective cost of the following

Question: Jade Mara needs to find the effective cost of the following two loans:

(1) a $200,000 loan at 12 percent for 20 years and

(2) a $50,000 loan at 14 percent for 20 years.

The loans require monthly payments and are fully amortizing. What is the effective (annual) cost of the two loans in percent?

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Finance Basics: Jade mara needs to find the effective cost of the following

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Finance Basics: Jade mara needs to find the effective cost of the following

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