Question

65. The Bobs Small Hut is offering a bedroom suite for $1,999. The credit terms are 60 months at $35 per month. What is the APR on this offer?

85. You want to purchase a new condominium which costs $350,000. Your plan is to pay 20 percent down in cash and finance the balance over 25 years at 6.25 percent. What will be your monthly mortgage payment?

The following information relates to the next question: You wish to buy a new house and can afford to put $30K of your own money for a deposit.

84. You have 15 years left, and owe $134,056. YOU are still required to make the original contractual payments of $1,136.61. You have shopped around at various banks, and although 30-year fixed mortgages are still priced at an APR of 3.6% approximately (the rate you are still paying), 15-year fixed mortgages are offered at 2.8% APR. If you refinance your mortgage, with a new 15-year mortgage, at an APR of 2.8%, and keep your payments at $1,136.61, when will you pay off the mortgage? (Ignore points and other refinancing costs.)

Answer 1

65)

Function Arguments ? X RATE Nper 60 Pmt -35 Pv 1999 FV o Type o 1 1 1 1 1 = 60 = -35 = 1999 = 0 = 0 = 0.001630451 Returns the interest rate per period of a loan or an investment. For example, use 6%/4 for quarterly payments at 6% APR. Type is a logical value: payment at the beginning of the period = 1; payment at the end of the period = 0 or omitted. Formula result = 0.16% Help on this function L OK ок | Cancel Cancel

Hence, APR is 1.96% (0.16%*12)

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