ACTSC_231_Tutorial_3

ACTSC_231_Tutorial_3 - remaining 10 years. In order to...

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ACTSC 231 Tutorial 3 Oct 27, 2009 1. Fill in the missing information in the following loan schedule. Time Payment Interest Principal Outstanding Loan Balance 0 - - - 1 $8,000 $22,342 2 $0 3 $19,16.14 $9,908 4 $0 2. A 35-year loan is to be repaid by level installments at the end of each year. The amount of interest paid in the 8 th installment is 135, while the amount of interest paid in the 22 nd installment is 108. Calculate the amount of interest paid in the 29 th installment. 3. An investor borrows 100,000 from a bank today. The deal is such that at the end of each year he only pays the bank the interest due, while the principal will be repaid exactly 20 years from now. Interest is charged at an annual effective rate of 8% for the first 10 years and 7% for the
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Unformatted text preview: remaining 10 years. In order to accumulate the principal at the end of 20 years, he makes deposits at the end of each year into a sinking fund earning 6% effective. Each of the first 10 deposits is X, while each of the remaining 10 deposits is 2X. (a) Find X. (b) Find the net outstanding loan balance at the end of the 15 th year. (c) Find the net interest payment in the 15 th year. (d) Find the increment in the sinking fund in the 15 th year. (e) Find the total payment in the 15 th year and verify that (c) + (d) = (e)...
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This note was uploaded on 10/21/2010 for the course ACTSC 231 taught by Professor Chisholm during the Fall '09 term at Waterloo.

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