Homework Answers
We are given the following information:
| r | 12.00% |
| n | 2 years |
| frequency | 12 (monthly) |
| PV | $ 1,000.00 |
We need to solve the following equation to arrive at the
required PMT
so the monthly PMT is $47.07
If payments are made annually:
The interest to be paid in year 1 would be opening balance of loan x rate of interest
The interest to be paid in year 1 would be 1000 x 0.12 = $120
Add Answer to:
Please answer both parts to
question 9 especially part b. And please show work :)
9....
show all work compounding effect will result in a higher future value with more frequent compounding...
show all work
compounding effect will result in a higher future value with more frequent compounding 9. (a) Assume that you have borrowed $1,000 for 2 years and you have an annual interest rate of 12% (annually compounded). What is the monthly payment due on the loan? (1 point) (b) Switch gears here and now assume that the payments are made annually. What is the annual interest expense for the borrower, and the annual interest income for the lender, during...
9. (a) Assume that you have borrowed $1,000 for 2 years and you have an annual...
9. (a) Assume that you have borrowed $1,000 for 2 years and you have an annual interest rate of 12% (annually compounded). What is the monthly payment due on the loan? (b) Switch gears here and now assume that the payments are made annually. What is the annual interest expense for the borrower, and the annual interest income for the lender, during Year 12 (Hint: Go to the TVM lecture notes for multiple cash flows and go to slide 15.)
(a) Assume that you have borrowed $1,000 for 2 years and you have an annual interest...
(a) Assume that you have borrowed $1,000 for 2 years and you have an annual interest rate of 12% (annually compounded). What is the monthly payment due on the loan? (1 point) (b) Switch gears here and now assume that the payments are made annually. What is the annual interest expense for the borrower, and the annual interest income for the lender, during Year 1? (Hint: Go to the TVM lecture notes for multiple cash flows and go to slide...
Please answer all parts A, B, and C. Please show all work! If you use Excel...
Please answer all parts A, B, and C. Please show all
work! If you use Excel to solve this problem please make clear the
calculations you made.
a. Calculate the monthly interest and principal cash flow for a fixed rate self amortizing mortgage with an initial balance of $350,000, a contract rate of 3.75%, and a maturity of two years. b. If the borrower decides to pay the loan back in full after the sixteenth month and the lender charges...
9. (a) Assume that you have borrowed $1,000 for 2 years and you have an annual...
9. (a) Assume that you have borrowed $1,000 for 2 years and you have an annual interest rate of 12% (annually compounded). What is the monthly payment due on the loan? (1 point)
*** Blacked out part is 17,000. Please show steps using logs. Thank you. The payment necessary...
*** Blacked out part is 17,000. Please show steps using logs.
Thank you.
The payment necessary to amortize a 5.4% loan of $71,000 compounded annually, with 5 annual payments is $16,580.96. The total of the payments is $82,904.80 with a total interest payment of $11,904.80. The borrower made larger payments of Calculate (a) the time needed to pay off the loan, (b) the total amount of the payments, and (c) the amount of interest saved a. The time needed to...
rate of 5.25%, 1 Lender I offers you a fixed rate 15-year mortgage at an annual...
rate of 5.25%, 1 Lender I offers you a fixed rate 15-year mortgage at an annual interes compounded monthly, with no points a. F ind your monthly payments under this option. b. Find the total amount of money paid to the lender. c. Find the total amount of interest you will pay over the life of the loan. 2. Lender II offers you a fixed rate 30-year mortgage at an annual interest rate of 5.75%, compounded monthly, with one point...
Please show the steps to calculate X 5.3.17 A borrower had a loan of $10,000.00 at...
Please show the steps to calculate
X 5.3.17 A borrower had a loan of $10,000.00 at 6% compounded annually, with 9 annual payments. Suppose the borrower paid off the loan after 5 years. Calculate the amount needed to pay off the loan. The amount needed to pay off this loan after 5 years is $. (Round to the nearest cent as needed.)
Please post with mathematical formulas please, not an excel sheet! 1. Mr. X is repaying a loan by monthly payments of $1...
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...
please show all work! 8. *Eight years ago you borrowed $200,000 to finance the pur- chase...
please show all work!
8. *Eight years ago you borrowed $200,000 to finance the pur- chase of a $240,000 home. The interest rate on the old mort- gage loan is 6 percent. Payments are being made monthly to amortize the loan over 30 years. You have found another lender who will refinance the current outstanding loan balance at 4 percent with monthly payments for 30 years. The new lender will charge two discount points on the loan. Other refinancing costs...
show all work
compounding effect will result in a higher future value with more frequent compounding 9. (a) Assume that you have borrowed $1,000 for 2 years and you have an annual interest rate of 12% (annually compounded). What is the monthly payment due on the loan? (1 point) (b) Switch gears here and now assume that the payments are made annually. What is the annual interest expense for the borrower, and the annual interest income for the lender, during...
9. (a) Assume that you have borrowed $1,000 for 2 years and you have an annual interest rate of 12% (annually compounded). What is the monthly payment due on the loan? (b) Switch gears here and now assume that the payments are made annually. What is the annual interest expense for the borrower, and the annual interest income for the lender, during Year 12 (Hint: Go to the TVM lecture notes for multiple cash flows and go to slide 15.)
Please answer all parts A, B, and C. Please show all
work! If you use Excel to solve this problem please make clear the
calculations you made.
a. Calculate the monthly interest and principal cash flow for a fixed rate self amortizing mortgage with an initial balance of $350,000, a contract rate of 3.75%, and a maturity of two years. b. If the borrower decides to pay the loan back in full after the sixteenth month and the lender charges...
9. (a) Assume that you have borrowed $1,000 for 2 years and you have an annual interest rate of 12% (annually compounded). What is the monthly payment due on the loan? (1 point)
*** Blacked out part is 17,000. Please show steps using logs.
Thank you.
The payment necessary to amortize a 5.4% loan of $71,000 compounded annually, with 5 annual payments is $16,580.96. The total of the payments is $82,904.80 with a total interest payment of $11,904.80. The borrower made larger payments of Calculate (a) the time needed to pay off the loan, (b) the total amount of the payments, and (c) the amount of interest saved a. The time needed to...
rate of 5.25%, 1 Lender I offers you a fixed rate 15-year mortgage at an annual interes compounded monthly, with no points a. F ind your monthly payments under this option. b. Find the total amount of money paid to the lender. c. Find the total amount of interest you will pay over the life of the loan. 2. Lender II offers you a fixed rate 30-year mortgage at an annual interest rate of 5.75%, compounded monthly, with one point...
Please show the steps to calculate
X 5.3.17 A borrower had a loan of $10,000.00 at 6% compounded annually, with 9 annual payments. Suppose the borrower paid off the loan after 5 years. Calculate the amount needed to pay off the loan. The amount needed to pay off this loan after 5 years is $. (Round to the nearest cent as needed.)
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...
please show all work!
8. *Eight years ago you borrowed $200,000 to finance the pur- chase of a $240,000 home. The interest rate on the old mort- gage loan is 6 percent. Payments are being made monthly to amortize the loan over 30 years. You have found another lender who will refinance the current outstanding loan balance at 4 percent with monthly payments for 30 years. The new lender will charge two discount points on the loan. Other refinancing costs...
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