The federal government, as you probably know by now, is bailing out the ailing AIG with an $85 billion loan. It’ll be paid back over two years as the insurance giant sells off its assets.
The terms: the LIBOR overnight rate banks lend to each other, plus an extra 8.5 percent for two years.
I figure the current LIBOR rate is 3.13%, so the total loan is 11.63%.
What if that were a car loan? How much would it mean to the old family budget? I fired up the Excel loan amortization schedule (which you can download and play with here).
Your first payment will be due in October:
Monthly payment: $3,986,574,012.02
Add an extra $39, of course, if the payment is late.
AIG should at least get a free toaster.