WORKSHEET(3.4) - equal monthly payments including all interest due If the bank charges 1 per month on the unpaid balance(12 per year compounded

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WORKSHEET (3.4) Present Value of an Annuity: ( 29 i i PMT PV n - + - = 1 1 Amortization: A loan is amortized if both the principal and compound interest are paid by a sequence of equal periodic payments. 1. Suppose you want to withdraw $1,000 every 6 months for the next 2 years. How much should you deposit in an account paying 6% compounded semi-annually. 2. What is the present value of an annuity that pays $200 per month for 5 years if money is worth 6% compounded monthly? 3. Suppose that you borrow $5,000 from a band to buy a car and agree to repay the loan in 36
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Unformatted text preview: equal monthly payments including all interest due. If the bank charges 1% per month on the unpaid balance (12% per year compounded monthly), how much should each payment be to retire the total debt, including interest in 36 months? ( 29 n i i PV PMT-+-= 1 1 4. Assume that you buy a television set for $800 and agree to pay for it in 18 equal monthly payments at 1.5% interest per month on the unpaid balance. How much are your payments?...
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This note was uploaded on 09/08/2010 for the course MATH 70 at San Jose State University .

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