23. a. A couple estimates that they will need to buy a new car in 4 years. They estimate that the...
23.
a.
A couple estimates that they will need to buy a new car in 4 years. They estimate that the car will cost $20,000. They decide to set up a sinking fund by making equal monthly payments into an account paying an annual rate of 5.5% compounded monthly. What is the amount of each payment?
| a. |
$321.99 |
|
| b. |
$340.85 |
|
| c. |
$365.25 |
|
| d. |
$373.46 |
b.
Consider a car loan amount of $8,000 for a term of 3 years at 12% interest compounded monthly. Find the monthly payment, and use it to find the total amount paid for this loan.
| a. |
$9,381.06 |
|
| b. |
$9,477.15 |
|
| c. |
$9,565.72 |
|
| d. |
$9,616.83 |
c.
Consider a 30-year mortgage at an interest rate of 8% compounded monthly. The amount to be mortgaged is $130,000. After the first month's payment, what is the new outstanding principal?
| a. |
$129,912.77 |
|
| b. |
$129,782.21 |
|
| c. |
$129,430.46 |
|
| d. |
$129,058.81 |
Homework Answers
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23. a. A couple estimates that they will need to buy a new car in 4 years. They estimate that the...
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