A company is planning to purchase a plot of land for $200,000 to build a factory. There are two options offered by a lending institution.
- 20-year loan at 3.25% APR compound monthly
- 30-year loan at 4.75% APR compound monthly
Where you need to:
- Calculate the monthly payment for both options.
- Calculate the finance charge for both options.
- Determine which option is better for the company & explain why