Question

which option is correct without explanation

11 If a company borrows $100 000 at an interest rate of 20% per year, compounded semi-annually and makes payments of $15,000 every 6 months, the length of time required for the company to pay off the loan is closest to A. 7 years B, 9 years C. Less than 6 years D. More than 10 years 12.lfi-10%, the value ofXìn the following CFD is closest to: A, 826 В. 1085 C, 268 D. 628 200 200 00 200 100 15, which o dhe talingan he uned o calse the val ofint CD 80 80 80 8 gueions 14 and 15 fased on the following statement An engineoring student bouht a car at a local used lot. The total price was $4,500. She is to pay for the car 12 ual monthly peyments, beginning with the first payment immediately as a down payment. on the lam is 1% per month. After making six payments (the down payment plus five additional The at payment is due (at the end of month 6) and also pay the engineering student $1,500. eomens, she decides to sell the car. A buyer agrees to pay a cash amount to pay off the loan in full at 4 What is the equat monthly payment? A 52639 . 539584 C $425 5 D $379 45 15 How much weill the car cost to the new buyer? A. $3,81685 В $2,255.45 C 52,908.56 D 53,985 32

Answer 1

At the end of 1st year total Amount = 10,000(1 + 20/200)^2 = 121000 Amount deposited = 15000 times 2 = 30000 Balance remaining = 121000 - 30000 = 91000 At end of 2nd year Amount = 91000 times 1.1^2 = 110110 Balance = 110110 - 30000 = 00110 At end of 3rd year Amount = 00110 times 1.1^2 = 96933.1 Balance = 96933.1 - 30000 = 66933.1 At end of the year, Amount = 66933.1 times 1.1^2 = 8.0989.051 Balance = 80989.051 - 30000 = 50989.051 At end of the 5th year, Amount = 50989.051 times 1.1^2 = 61696.75 Balance = 61696.75 - 30000 = 31696.75 At end of the 6th year, Amount = 31696.75 times 1.1^2 = 38353.06 Balance = 38353.06 - 30000 = 8353.06 At end of 6.5 yx Amount = 8353.06 (1.1)^2 times 0.5 = 9188.37 This month amount will be deposited by the company in the first 6 months pf 7th year length of time required to pay off loan is 6.5 year which is closest to part A i.e 7 years Hence correct option is 7 year.