Describe the cash flow pattern of a fully amortized loan with equal total payments.
Describe the cash flow pattern of a fully amortized loan with equal total payments.
Homework Answers
In case of fully amortized loan, the payments are all equal. Initially, the higher percentage of each payment goes towards interest payment and gradually as the loan balance declines the principal is higher percentage of each payment.
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Describe the cash flow pattern of a fully amortized loan with
equal total payments.
Fully amortized loan (annual payments for principal and interest with the same amount each year). Chuck...
Fully amortized loan (annual payments for principal and interest with the same amount each year). Chuck Ponzi has talked an elderly woman into loaning him $45,000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $45,000 with an annual interest rate of 7% over the next 20 years. Determine the cash flow to the woman under a fully amortized loan, in which Ponzi will...
Fully amortized loan (annual payments for principal and interest with the same amount each year). Chuck...
Fully amortized loan (annual payments for principal and interest with the same amount each year). Chuck Ponzi has talked an elderly woman into loaning him $40,000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $40,000 with an annual interest rate of 6% over the next 20 years. Determine the cash flow to the woman under a fully amortized loan, in which Ponzi will...
Calculate the equal monthly payment of interest and principal for a $750,000 loan fully amortized over...
Calculate the equal monthly payment of interest and principal for a $750,000 loan fully amortized over 12 years at an annual rate of interest of 5.75%.
The following loan is a simple interest amortized loan with monthly payments. The following loan is...
The following loan is a simple interest amortized loan with
monthly payments.
The following loan is a simple interest amortized loan with monthly payments. $289,000, 102%, 35 years (a) Find the monthly payment. (Give your answer to the nearest cent.) Payment $ (b) Find the total interest for the given simple interest amortized loan. (Give your answer to the nearest cent.) Total interest $
you just bought an investment property for $450,000 . The loan is fully amortized over 30...
you just bought an investment property for $450,000 . The loan is fully amortized over 30 years and payments are made monthly You took a loan for 80% of the purchase price to buy the property. The nominal annual rate of interest is 3.9% for this loan. a. How much will your monthly loan payments be? b. How much total interest will you pay over the entire life of the loan? What is your loan balance after exactly 15 years...
3. A $300,000 home loan is amortized by equal monthly payments for 25 years, starting one...
3. A $300,000 home loan is amortized by equal monthly payments for 25 years, starting one month from the time of the loan at a nominal rate of 7% convertible monthly. a. Find the monthly payment amount. b. Find the outstanding balance when 10 years of payments remain. c. Find the total interest paid during the last 10 years of the loan? 4. Eddie is repaying a 20-year loan of 10,000 with payments at the end of each year. Each...
Please solve A, B,C, and D 1. Duration-Amortized Loan Your FI has a loan with the...
Please solve A, B,C, and D
1. Duration-Amortized Loan Your FI has a loan with the following characteristics Principle $100,000 Rate (annual) 6% Loan Terms: The loan is for a 2-year period, Payments are made every six months. Each payment consists of all accrued interest (up to that point), plus 25% of the total principle. There will be a total of four payments, after which the principle will be fully repaid. The payment schedule is as follows: Year Principle Interest...
You are considering buying a car with an amortized loan. The car loan will be $40,000...
You are considering buying a car with an amortized loan. The car loan will be $40,000 and have an annual interest rate of 2.8%, compounded monthly. You have two options for financing the car, the first is a fully amortized loan for 72 months while the second is a partially amortized loan for 36 months with a balloon payment of $18,000 (i.e. you will still owe $18,000 on the loan at month 36). What are the payments for each option?
1. When loan payments are amortized, the total amount you owe every month 2. Why does...
1. When loan payments are amortized, the total amount you owe every month 2. Why does the amount of INTEREST you pay decrease every month? 3. What happens to the principal paid over time?
A loan of $370,000 is amortized over 30 years with payments at the end of each...
A loan of $370,000 is amortized over 30 years with payments at the end of each month and an interest rate of 8.9%, compounded monthly. Answer the following, rounding to the nearest penny. a) Find the amount of each payment. $ b) Find the total amount of interest paid during the first 15 payments. $ c) Find the total amount of interest paid over the life of the loan. $ d) Find the total of all payments made over 30...
Fully amortized loan (annual payments for principal and interest with the same amount each year). Chuck Ponzi has talked an elderly woman into loaning him $45,000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $45,000 with an annual interest rate of 7% over the next 20 years. Determine the cash flow to the woman under a fully amortized loan, in which Ponzi will...
Fully amortized loan (annual payments for principal and interest with the same amount each year). Chuck Ponzi has talked an elderly woman into loaning him $40,000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $40,000 with an annual interest rate of 6% over the next 20 years. Determine the cash flow to the woman under a fully amortized loan, in which Ponzi will...
The following loan is a simple interest amortized loan with
monthly payments.
The following loan is a simple interest amortized loan with monthly payments. $289,000, 102%, 35 years (a) Find the monthly payment. (Give your answer to the nearest cent.) Payment $ (b) Find the total interest for the given simple interest amortized loan. (Give your answer to the nearest cent.) Total interest $
you just bought an investment property for $450,000 . The loan is fully amortized over 30 years and payments are made monthly You took a loan for 80% of the purchase price to buy the property. The nominal annual rate of interest is 3.9% for this loan. a. How much will your monthly loan payments be? b. How much total interest will you pay over the entire life of the loan? What is your loan balance after exactly 15 years...
3. A $300,000 home loan is amortized by equal monthly payments for 25 years, starting one month from the time of the loan at a nominal rate of 7% convertible monthly. a. Find the monthly payment amount. b. Find the outstanding balance when 10 years of payments remain. c. Find the total interest paid during the last 10 years of the loan? 4. Eddie is repaying a 20-year loan of 10,000 with payments at the end of each year. Each...
Please solve A, B,C, and D
1. Duration-Amortized Loan Your FI has a loan with the following characteristics Principle $100,000 Rate (annual) 6% Loan Terms: The loan is for a 2-year period, Payments are made every six months. Each payment consists of all accrued interest (up to that point), plus 25% of the total principle. There will be a total of four payments, after which the principle will be fully repaid. The payment schedule is as follows: Year Principle Interest...
1. When loan payments are amortized, the total amount you owe every month 2. Why does the amount of INTEREST you pay decrease every month? 3. What happens to the principal paid over time?
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