The owners of Nimble Manufacturing, INC. (NM) have decided it is time to acquire a bigger manufacturing facility which will require a loan of $40 million dollars. NM is now ready to meet with George Jetson, the loan officer for Central Bank. The meeting is to discuss the mortgage options available to the company to finance the new facility
NMBegins the meeting by discussing a 30 year mortgage. The loan would be repaid in equal monthly installments. Because of the previous relationship between NM and the bank, there would be no closing costs for the loan. Central Bank States that the APR of the loan would be 6.1%. Todd asks if a shorter mortgage loan is available. Central Bank says that the bank does have a 20 year mortgage available at the same APR.
Please help me calculate total payments for the loans. Please show me how to do so using a financial calculator.