DS_Unit_4_Barnes_Charity

# DS_Unit_4_Barnes_Charity - Unit 4 Distingueshed Scholar...

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Unit 4 Distingueshed Scholar Project Schedule Computed With Fixed R Year Rate Beginning Amount Payment Interest 1.00 7.5% 150,000.00 37,074.71 11,250.00 2.00 7.5% 124,175.29 37,074.71 9,313.15 3.00 7.5% 96,413.73 37,074.71 7,231.03 4.00 7.5% 66,570.05 37,074.71 4,992.75 5.00 7.5% 34,488.09 37,074.71 2,586.61 Total Payments = 185,373.55 Schedule Computed With an ARM Year Rate Beginning Amount Payment Interest 1.00 6.0% 150,000.00 35,609.46 (N=5, I = 6%) 9,000.00 2.00 7.0% 123,390.54 36,428.36 (N=4, I = 7%) 8,637.34 3.00 8.0% 95,599.52 37,095.82 7,647.96 4.00 9.0% 66,151.66 37,605.16 5,953.65 5.00 10.0% 34,500.15 37,950.17 3,450.01 Total Payments = 184,688.97 *******The better deal is the variable interest rate.********** Consider the following scenario: John buys a house for \$150,000 and takes out a five year adju makes annual payments rather than monthly payments. Unfortunately for John, interest rates go up by 1% for each of the five years of his loan (Year 1 Year 5 is 10%). Calculate the amount of John's payment over the life of his loan. Compare these findings if he

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## This note was uploaded on 05/15/2011 for the course ECONOMICS 204 taught by Professor Perti during the Spring '11 term at Kaplan University.

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DS_Unit_4_Barnes_Charity - Unit 4 Distingueshed Scholar...

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