Homework Answers
1.
rate compounded monthly=((1+12%/26)^(26/12)-1)*12=12.0323160%
Monthly payment=8000*(12.0323160%/12)/(1-1/(1+12.0323160%/12)^48)=210.79764074
2.
rate compounded monthly=((1+6%)^(1/12)-1)*12=5.8410607%
Loan oustanding=8000*(1+12.0323160%/12)^24-210.79764074/(12.0323160%/12)*((1+12.0323160%/12)^24-1)=4476.62061419
Monthly
payment=4476.62061419*(5.8410607%/12)/(1-1/(1+5.8410607%/12)^24)=198.08610930
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