MA373 F15 Homework Chapter 5 Solutions

# MA373 F15 Homework Chapter 5 Solutions - Math 373 Fall 2013...

This preview shows pages 1–5. Sign up to view the full content.

October 8, 2015 Copyright 2013, 2014, 2015 Math 373 Fall 2013 Homework Chapter 5 Chapter 5 Section 2 1. Zhu borrows 100,000 to be repaid with five annual payments. The annual effective interest rate on the loan is 6%. Complete an amortization table for this loan. Solution: First we need to find the appropriate payments using our calculator: 5 / 6 100,000 23,739.64 N I Y PV CPT PMT   Now we can create the Amortization table. Time Payment Interest in Pmt Principal in Payment OLB 0 100,000.00 1 23,739.64 6,000.00 17,739.64 82,260.36 2 23,739.64 4,935.62 18,804.02 63,456.34 3 23,739.64 3,807.38 19,932.26 43,524.08 4 23,739.64 2,611.44 21,128.20 22,395.89 5 23,739.64 1,343.75 22,395.89 0.00

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
October 8, 2015 Copyright 2013, 2014, 2015 2. Yi has a loan of 15,000 which is being repaid with ten level annual payments of 2000. a. Calculate the amount that Yi will pay in principal over the life of the loan. Solution: Total Amount of Principal=Total Loan Amount= 15,000 b. Calculate the amount of interest that Yi will pay. Solution: Interest Paid=Total Amount Paid-Total Loan Amount 10*2000 15,000 5,000
October 8, 2015 Copyright 2013, 2014, 2015 3. Jake has repaid a loan with 4 annual payments of 950 each. The total interest repaid in those four payments was 800. Calculate the annual effective interest rate on the loan. Solution: Total Amount Paid=Total Amount of Interest Paid+Total Loan Amount Total Loan Amount 950*4 800 3000 Now we can find the interest rate using our financial calculator. 3000 4 950 / 10.175 PV N PMT CPT I Y   4. Mark borrowed money to buy a new car. Payments are made monthly. The loan has an nominal rate of interest of 12% compounded monthly. Immediately after the 15 th payment, Mark has an outstanding loan balance of 8500. Calculate the amount of interest in his 16 th payment. Solution: Amount of interest in the 16 th payment= (12) 15 85000*0.01 85 12 i OLB 5. Nik took a loan to buy a new couch for his apartment. He is making monthly payments and the loan has a nominal interest rate of 9% compounded monthly. Immediately after the 8 th payment, Nik still owes 800 on his loan. The principal in his 9 th payment is 90. Determine the amount of the 9 th payment. Solution: (12) 0.0075 12 i 8 800 OLB Princ 9 =90 Payment9=(Principal in Payment 9)+(Interest in Payment 9)= 90 800(0.0075) 96

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
October 8, 2015 Copyright 2013, 2014, 2015 6. Chris has a mortgage that is being repaid with monthly payments. The annual effective interest rate on his loan is 8%.
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern