A group of private investors purchased a condominium complex for
$2 million. They made an initial down payment of 15% and obtained
financing for the balance. The loan is to be amortized over 14
years at an interest rate of 11% per year compounded quarterly.
(Round your answers to the nearest cent.)
What is the required quarterly payment?
$
How much total interest will be paid on the loan?
$
Ans required quarterly payment = $ 59850.40
total interest will be paid on the loan = $ 1651622.38
| Loan Amount = | Cost * ( 1 - Downpayment) |
| 2000000 * ( 1 - 15%) | |
| 1700000 | |
| P = | Regular Payments |
| PV = | Loan Amount |
| r = | rate of interest |
| n = | no of periods |
| P = | r (PV) |
| 1 - (1 + r )-n | |
| P = | (11%/4)*1700000 |
| 1 - (1 / (1 + 11%/4)^56)) | |
| P = | 46750 |
| 0.78111425 | |
| P = | 59850.40 |
| TOTAL INTEREST = | TOTAL EMI - LOAN |
| 59850.40 * 56 - 1700000 | |
| 1651622.38 |
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