(B-8) Angela Montery has a five-year car loan for a Jeep Wrangler at an annual interest rate of 6.9% and a monthly payment of $599.50. After 3 years, Angela decides to purchase a new car. What is the payoff on Angela's loan?
(C-9) You receive a 10-year subsidized student loan of $11,000 at an annual interest rate of 5%. What are your monthly loan payments for this loan when you graduate?
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Using Financial Calculator.
1. No.of periods left (N) = 60-36 = 24.
I/Y = 6.9/12
PMT = -599.50
CPT Press PV = $13,403.46
Formula: The present value of an ordinary annuity (PV)
PV = C× [1-(1+r)^-n]/r
PV = Present value (The cummulative amount available at Present)
C= Periodic cash flow.
r =effective interest rate for the period.
n = number of periods.
PV = 599.50× [1-(1+0.00575)^-24]/0.00575
PV = $13,403.46
N= 10*12 = 120
I/Y = 5/12
PV = 11,000
CPT Press PV = -116.67
The monthly loan payment is $116.67
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