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What is the interest rate on an interest only loan, if the principal balance is $574,000, and the annual payment after year 1 is $24,108...?

Answer :

abiolataiwo2015 abiolataiwo2015

Today at 6:40 AM

Answer:

4.2%

Explanation:

Calculation for interest rate on an interest only loan

Using this formula

Interest rate on an interest only loan=Annual payment after year 1/Principal balance

Let plug in the formula

Interest rate on an interest only loan= $24,108/$574,000

Interest rate on an interest only loan= 0.042 ×100

Interest rate on an interest only loan=4.2%

Therefore the Interest rate on an interest only loan will be 4.2%

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