Question

You borrow $100,000 today. You will repay the loan with 20 equal annual payments starting in year 3 If the interest rate on the loan is 5% APR, compounded annually, how big is each payment?

Answer #1

for first 3 years there is no payment but interst will be accumulated along with the principal amount

ie. first year = (100000* 5%)+ 100000 = 105000

second year = 105000+ (105000*5%) = 110250

third year = 110250 + (110250* 5%) = 115762.5

**When the repayment starts, the total amount will be
115762.5**

r= 0.05

PV =115762.5

n = 20

P=(0.05* 115762.5)/(1-(1+0.05)^-20

=5788.125 /

ie, **P =
$9289.07**

You want to borrow $44,536. You must repay the loan in 6 years
in equal monthly payments and a single $3,319 payment at the end of
6 years. Interest rate is 3% nominal per year.
What will be the loan balance immediately after the
32th payment?

You borrow $70,000 today at an interest rate of 5.82 percent.
You will repay the loan as an annuity over 6 years, with the first
payment taking place one year from today. Calculate the interest
portion of your second payment

You want to borrow $22,425. You must repay the loan in 12 years
in equal monthly payments and a single $2,894 payment at the end of
12 years. Interest rate is 14% nominal per year.What will be the
loan balance immediately after the 50th payment?

Consider a 4-year amortizing loan. You borrow $2,900 initially
and repay it in four equal annual year-end payments. a. If the
interest rate is 9%, what is the annual payment? (Do not round
intermediate calculations. Round your answer to 2 decimal places.)
b. Prepare an amortization schedule. (Do not round intermediate
calculations. Round your answers to 2 decimal places. Leave no
cells blank - be certain to enter "0" wherever required.)

Jed wants to borrow
$1,000
from you. He is proposing to repay you with three annual
payments of
$347.03
starting one year from
now.
In addition, he will make a final lump-sum payment of
$120
three years from
today.
What rate of return are you earning on the loan?
What rate of return are you earning on the loan?

You borrow $70,000 and arrange to pay off the loan in five equal
annual installments.
Payments will be made at the end of each year. The loan interest
rate is 7.50 percent.
What percentage of your second year's payment will go toward
interest?
A.
19.5 percent
B.
17.2 percent
C.
80.5 percent
D.
28.7 percent
E.
25.1 percent

You borrow $400,000 at a rate of 5% and make annual payments for
20 years to repay the loan. What Excel function can be used to
calculate the loan balance immediately after making the 5th
payment?
Question 12 options:
=PMT(5%, 20, -400000)
=PV(5%,15,PMT(5%,20,400000))
=PV(5%, 15, -400000)
=FV(5%, 240, 400000)

2. Suppose you borrow $20,000 at an 18 percent simple interest
but must repay your loan in 12 equal monthly payments.
a. Find the APR for this loan.
b. What is the corresponding EAR?

Suppose you borrow $20,000 and then repay the loan by making 12
monthly payments of $1,492.92 each. What rate will you be quoted on
the loan?

2. Suppose you borrow $20,000 at an 18 percent simple interest
but must repay your loan in 12 equal monthly payments.
a. Find the APR for this loan.
b. What is the corresponding EAR?
3. Suppose you deposit $20,000 in a savings account. After 210
days, you withdraw your funds. If the bank paid you $340 in
interest for the 210-day period, what is your APY?
4. Suppose that the house of your dreams costs $1,200,000. You
manage to scrap...

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