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Unformatted text preview: A is given by , where is the annual rate, is the frequency 1 (1 ) of compounding, is the periodic rate ( ), and is the term (time) of the loan. kt i R A r k i r i i t k- = - + = Ex 1: Find the amount of an installment payment required to repay a loan of $15,000 repaid over 12 years, with monthly payments at a 9% annual rate. 2 Ex 2: Hugh is buying a $18,500 new car and financing it over the next 5 years. He is able to get a 9.3% loan. What will his monthly payments be? Ex 3: One lending institution offers two mortgage plans. Plan A is a 15-year mortgage at 12%. Plan B is a 20-year mortgage at 11%. For each plan, find the monthly payment to repay $130,000. Ex 4: For each plan above (A and B of problem 3), how much total would all payments equal? How much interest is paid in each plan?...
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This note was uploaded on 04/23/2011 for the course MA 152 taught by Professor Owendavis during the Spring '08 term at Purdue University-West Lafayette.
- Spring '08