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Problem #3: Mort is to pay off a loan of $80,000 with equal payments at the end of every month over 10 years (i.e., 120 month

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Answer #1

First, let's find the monthly payment

Effective monthly rate = (1 + 0.045)^(1/12) - 1

Effective monthly rate = 0.0036748094 = 0.36748094%
PV = \frac{PMT}{ r } * \left [ 1 - \frac{1}{(1+ r )^{ n }} \right ]

80,000 = \frac{PMT}{ 0.0036748094 } * \left [ 1 - \frac{1}{(1+ 0.0036748094 )^{ 120 }} \right ]

80,000 = \frac{PMT}{ 0.0036748094 } *0.3560723179

80,000 = PMT * 96.8954520199

PMT = \frac{80,000}{96.8954520199}

PMT = \$825.6321461153

Now let's find N with PMT = 825.6321461153 * 2 = 1,651.2642922306

PMT = -1,651.2642922306

PV = 80,000

FV = 0

I/Y = 0.36748094

CPT N

N = 53.45009 months

N = 54 months

Can you please upvote? Thank You :-)

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