CH.7P1-6 - 12.00% 24 2500 ($117.68) 8.75% 24 2500 ($113.93)...

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P.1 7% + 6% = 13% almost doubling would increase monthly payments, but the principal amount would be decreasing. P.2 8.75% 0.79 6.93% with state and federal tax savings $47.07 2.5 $117.68 for unsecured debt $45.57 2.5 $113.93 for home equity loan Compounded Take pmt $113.93 24 $2,500.00 12.00% 6.93% 8.75% months Loan ($321.16) ($216.63) ($252.47) Simple PV Intrest Int/pmt $2,500.00 $600.00 $25.00 So, a savings of $90 is reported over the life of the loan in addition to tax savings of $48.62. Therefore, Rico should choose the home equity loan to save the most money. I Rate Nper Princ. PMT
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Unformatted text preview: 12.00% 24 2500 ($117.68) 8.75% 24 2500 ($113.93) 6.93% 24 2500 ($111.85) P.3 $1,500.00 12.00% $180.00 $1,680.00 $140.00 134.69 p/mo p/mo simple Saving $63.72 per month using loan with simple interest method. P.4 If the above was paid off in 6 moths they would save 27% of total interest payments ($48.46) Rebate = 0.27 $180.00 $48.46 P.5 Borrowing $1000 repaid monthly for 12 months is better. $60 for the single payment loan for a total of $1060 vs. intrest on installment loan is $32.80 for a monthly payment of $86.07, totaling $1032.80 P.6 P.7 P.8...
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CH.7P1-6 - 12.00% 24 2500 ($117.68) 8.75% 24 2500 ($113.93)...

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