HW04key.xlsx - Prepare an amortization schedule for a...

Info icon This preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Prepare an amortization schedule for a five-year loan of $67,500. The interest rate is 7 percent per year, and the loan calls for equal annual payments. How much interest is paid in the third year? How much total interest is paid over the life of the loan?
Image of page 1

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

View Full Document Right Arrow Icon
Rate 7% NPER 5 PV $67,500 PMT ($16,462.62) FV $0 Period Beginning Balance Payment Interest Principal Ending Balance 1 $67,500 $16,462.62 $4,725 $11,737.62 $55,762.38 2 $55,762.38 $16,462.62 $3,903 $12,559.26 $43,203.12 3 $43,203.12 $16,462.62 $3,024 $13,438.40 $29,764.72 4 $29,764.72 $16,462.62 $2,084 $14,379.09 $15,385.63 5 $15,385.63 $16,462.62 $1,077 $15,385.63 $0.00 Total $14,813 $67,500
Image of page 2
You’re prepared to make monthly payments of $190, beginning at the end of this month, into an account that pays 7 perce compounded monthly. How many payments will you have made when your account balance reaches $20,000?
Image of page 3

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

View Full Document Right Arrow Icon
PV 0 PMT ($190) FV $20,000 RATE 0.005833 NPER 82.30839
Image of page 4
You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 30-year mortgage loan for 80 pe $2,700,000 purchase price. The monthly payment on this loan will be $13,400. What is the APR on this loan? The EAR?
Image of page 5

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

View Full Document Right Arrow Icon
Period 30 Years Mortgage Amount $ 2,160,000 PV $ 2,160,000 PMT ($13,400) FV 0 NPER 360 RATE 0.53% APR 6.32% EAR 6.51%
Image of page 6
A local finance company quotes an interest rate of 16.5 percent on one-year loans. So, if you borrow $25,000, the interest f
Image of page 7

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

View Full Document Right Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    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.

    Student Picture

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

  • Left Quote Icon

    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.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    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.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern