Economic Analysis Test I Spring 2016 NAME: Clearly State and Use Any Reasonable Assumptions 1. You...

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Economic Analysis Test I Spring 2016 NAME: Clearly State and Use Any Reasonable Assumptions 1. You borrow 25,000 at 12% per year compounded monthly. The term ofthe loan is 4 years. (a) What are your monthly payments? s000 M-48 /02033)(25000): bS8.25 (b) What is the unpaid balance (U in the text) after 3 years? (550.25) (c) In the 30 month what part of the monthly payment goes towards principal and what part towards interest?

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What is Your Monthly payment PV factor Pv Factor -60/0.12/12) 44.95504 25000/44.955 556.11 What is Unpaid balance after 3 years 21.24339 556.11*21.24339 11813.69 (1+0.012/12)A-24)/(0.12/12) Part C 1+0.12/12)-31//012/12) 26.5423 556.11 26 Interest Payment-14760.46*12%/12-147.60 Principal Payment 556.11-147.60 408.51 (1+0.12/12)A-31)/(0.12/12)

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