Homework Answers
| LOAN A | |||||||||||||
| Rate | Monthly interest rate=(12/12)%= | 1% | |||||||||||
| Nper | Number of months of payment | 36 | |||||||||||
| Pmt | Monthly payment | $1,720 | |||||||||||
| PV | Loan balance today | $51,784.91 | (Using PV function of excel with Rate=1%, Nper =36, Pmt=-1720) | ||||||||||
| T=Nper*Pmt | Total Payment | $61,920 | |||||||||||
| I=T-PV | Interest Payment | $10,135.09 | |||||||||||
| LOAN B | |||||||||||||
| PV1 | Current outstanding Loan Balance | $24,618.01 | |||||||||||
| Rate | Monthly interest rate =(18/12)% | 1.50% | |||||||||||
| Nper | Number of months of payment | 36 | |||||||||||
| X | Monthly Payment | $890.00 | (Using PMT function of excel with Rate=1.5%, Nper =36, Pv=-24618.01) | ||||||||||
| T1=Nper*X | Total Payment | $32,040.00 | |||||||||||
| I1=T1-PV1 | Interest Payment | $7,421.99 | |||||||||||
| Z=I+I1 | Total interest payment | $17,557.08 | (10135.09+7421.99) | ||||||||||
| (For Loan A and Loan B) | |||||||||||||
| LOAN FROM BANK C | |||||||||||||
| PV2=PV+PV1 | Total Loan taken from Bank C | $76,402.92 | |||||||||||
| Rate | Monthly interest rate=(9/12)% | 0.75% | |||||||||||
| Nper | Number of months of payment | 36 | |||||||||||
| Y | Monthly Payment | $2,429.59 | (Using PMT function of excel with Rate=0.75%, Nper =36, Pv=-76402.92) | ||||||||||
| T2=Y*Nper | Total payment | $87,465.33 | |||||||||||
| I2=T2-PV2 | Interest Payment | $11,062.41 | |||||||||||
| Z-I2 | Amount of Interest saved | $6,494.68 | (17557.08-11062.41) | ||||||||||
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Problem 3 (Required, 25 marks) Recently, Mr. A has 2 outstanding loans: • Loan A -...
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Problem 4 (Required, 25 marks) Recently, a company has borrowed an amount of $300,000 from the bank. The company will pay the interest payment interest due) to the bank at the end of every month until the loan principal is repaid. The bank charges interest rate at an annual nominal interest rate 10% compounded continuously. At the same time, the company makes a monthly deposit $600 into a sinking fund at the end of every month. The sinking fund earns...
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Please post with mathematical
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please show all steps 2. You have borrowed a loan form bank for $400,000 to finance...
please show all steps
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Problem 2 (Required, 25 marks) Tina borrows an amount $500000 from the bank and agrees to repay the loan by 4n level monthly payments (with amount X) made at the end of every month. The first repayment will be made 1 month after today. You are given that • The loan charges interest at an annual nominal interest rate 5.9% convertible continuously. • The outstanding balance at 25th repayment date is OLBs = 397021.93. (a) Calculate the interest due and...
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Please post with mathematical
formulas please, not an excel sheet!
1. Mr. X is repaying a loan by monthly payments of $146.75 at a nominal annual rate of 9% compounded monthly. Immediately after one of the pay- ments is made, when Mr. X has still 50 payments ahead of him, the lender lowers the interest rate to 7.8% nominal annual rate compounded monthly. Mr. X chooses to keep the same monthly payments, except the last payment that is larger than...
2. You take out a home loan of $500 000, which will be repaid in 40 level payments at the end of each six-month period, starting in six months. The annual interest rate is 5% (a) Compute the size of the repayments if interest is compounded every six months. (b) Suppose instead that interest is compounded monthly but repay- ments are still made every six months. Determine the equivalent annual interest rate for payments made every six months and find...
please show all steps
2. You have borrowed a loan form bank for $400,000 to finance a new house. You are required to repay the loan in 360 equal monthly payments starting at the end of month 1. The bank charges an interest rate of 3% APR, compounded monthly. (i) What is the reduction in repayment time if you decide to add $400 to each payment? What is the remaining balance of the loan after 120 payments under (ii) the...
2. You take out a home loan of $500 000, which will be repaid in 40 level payments at the end of each six-month period, starting in six months. The annual interest rate is 5% (a) Compute the size of the repayments if interest is compounded every six months. (b) Suppose instead that interest is compounded monthly but repay- ments are still made every six months. Determine the equivalent annual interest rate for payments made every six months and find...
Samuel and Sandra Sharp wish to borrow $600,000 to buya home. The loan from the Highway Bank requires equal monthly repayments over 20 years, and carries an interest rate of 5-1 % per annum, compounded monthly. The first repayment is due at the end of one month after the loan proceeds are received. You are required to calculate the following. i) The effective annual interest rate on the above loan (show as a percentage correct to 3 decimal places). li)...
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