Problem based on loan comparison


Can you help me get started with this assignment?

Question: Your uncle Fred just purchased a new boat. He brags to you about the low 7% interest rate (APR, monthly compounding) he obtained from the dealer. The rate is even lower than the rate he could have obtained on his home equity loan (8% APR, monthly compounding). If his tax rate is 25% and the interest rate on the home equity loan is tax deductible, which loan is truly cheaper? Please show in excel.

Solution Preview :

Prepared by a verified Expert
Finance Basics: Problem based on loan comparison
Reference No:- TGS02078328

Now Priced at $20 (50% Discount)

Recommended (96%)

Rated (4.8/5)