Question

John borrowed $84,000 at 9.60% compounded monthly He agreed to
repay the loan in equal monthly payments over a 15 year
amortization term.

(a) What is the size of the monthly payment? Enter answer to 2
decimal places

For parts (b),(c) and (d) DO NOT round the monthly payments
but use exact results as found in your calculator. Nevertheless
enter answers you find in each answer box to 2 decimal
places.

(b) How much of the 22nd payment is interest?

(c) How much of the 94th payment goes towards principal?

(d) How much principal was paid down in the second year?

(e) Now assume that in part (a) you had rounded the payments
DOWN to the nearest dollar, what would be the size of the final
payment? Round down to nearest dollar means for example 121.8 is
rounded to $121.00 (NOT 122)

(f) Re-do this problem by going back to the first step in part
(a) without making any rounding of the payments. Assume 4 years has
gone by and after the 48th payment, the loan term is reset, with
the banks new rate becoming 8.2% with semi-annual compounding The
borrower also pays down an extra $4000 at this time. What would be
the new monthly payments?

Answer #1

Angelo Lemay borrowed $8000 from his credit union. He agreed to
repay the loan by making equal monthly payments for five years.
Interest is 9% compounded monthly.
(Please use financial BAII calculator method by showing
calculator inputs)
(a) What is the size of the monthly payments?
(b) How much will the loan cost him?
(c) How much will Angelo owe after 18 months?
(d) How much interest will he pay in his 36th payment?
(e) How much of the principal...

A $10000 loan has an interest rate of 12% per year, compounded
monthly, and 30 equal monthly payments are required.
a) If payments begin at the end of the first month, what is the
value of each payment?
b) How much interest is in the 10th payment?
c) What would you enter into Excel to solve part b?
d) What is the unpaid balance immediately after the 10th
payment?
e) If the 30 loan payments are deferred and begin at...

You have just taken out a $ 15,000 car loan with a 4 %APR,
compounded monthly. The loan is for five years. When you make your
first payment in one month, how much of the payment will go toward
the principal of the loan and how much will go toward
interest?
When you make your first payment,......will go toward the
principal of the loan and ..... will go toward the
interest. (Round to the nearest cent.)

You have just taken out a $28,000 car loan with a 6%APR,
compounded monthly. The loan is for five years. When you make your
first payment in one month, how much of the payment will go toward
the principal of the loan and how much will go toward
interest? (Note: Be careful not to round any intermediate steps
less than six decimal places.)
When you make your first payment,$__will go toward the
principal of the loan and$___ will go toward...

John borrowed $125,000 to buy a house. His loan cost was 11% and
he promised to repay the loan in 15 equal annual payments. How much
principal is amortized with the first payment?
$17, 383
$13,750
$3,633
$121,367

You have just taken out a $28,000 car loan with a 6 %APR,
compounded monthly. The loan is for five years. When you make your
first payment in one month, how much of the payment will go toward
the principal of the loan and how much will go toward
interest? (Note: Be careful not to round any intermediate steps
less than six decimal places.)
When you make your first payment,$__ will go toward the
principal of the loan and $__will...

You have just taken out a $30,000 car loan with a 7% APR,
compounded monthly. The loan is for five years. When you make your
first payment in one month, how much of the payment will go toward
the principal of the loan and how much will go toward
interest? (Note: Be careful not to round any intermediate steps
less than six decimal places.) When you make your first payment,
$ nothing will go toward the principal of the loan...

You have just taken out a car loan for $22,000 with a 5% APR,
compounded monthly. The loan is for 5 years. When you make you
first payment in one month, how much of the payment will go toward
the principal of the loan and how much will go towards the
interest? (Note: be careful not to round any intermediate steps
less than six decimal places.)
When you make you first payment, $X will go towards the
principal of the...

Catherine received a 30 year loan of $240,000 to purchase a
house. The interest rate on the loan was 5.90% compounded
monthly.
a. What is the size of the monthly loan
payment?
$
Round to the nearest cent
b. What is the principal balance of the loan at
the end of 3 years?$
Round to the nearest cent
c. By how much will the amortization period
shorten if Catherine made an extra payment of $54,000 at the end of
the...

A 25-year, $420,000 mortgage at 3.90% compounded semi-annually
is repaid with monthly payments.
a. What is the size of the monthly
payments?
Round to the nearest cent.
b. Find the balance of the mortgage at the end
of 5 years?
Round to the nearest cent.
c. By how much did the amortization period
shorten by if the monthly payments are increased by $125 at the end
of year five?
years
months
Express the answer in years and months, rounded to...

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