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

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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?

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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
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?

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PV 0 PMT (\$190) FV \$20,000 RATE 0.005833 NPER 82.30839
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?

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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%
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

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• Spring '16

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