Homework Answers
Ans $ 89.80
| P = | Regular Payments | |
| PV = | Loan Amount | |
| r = | rate of interest | |
| n = | no of periods | |
| a) | P = | r (PV) |
| 1 - (1 + r )-n | ||
| P = | (3.5%/12)*100000 | |
| 1 - (1 / (1 + 3.5%/12)^360)) | ||
| P = | 291.6666667 | |
| 0.649527039 | ||
| P = | 449.04 | |
| b) | P = | r (PV) |
| 1 - (1 + r )-n | ||
| P = | (3.5%/12)*80000 | |
| 1 - (1 / (1 + 3.5%/12)^360)) | ||
| P = | 233.3333333 | |
| 0.649527039 | ||
| P = | 359.24 | |
| Difference = | 449.04 - 359.24 | |
| 89.80 | ||
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