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Extra3.5problems&amp;review

# Extra3.5problems&amp;review - Additional Problems for...

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Additional Problems for section 3.5 in MGF 1107 1. Suppose you have a balance owed on a car loan of \$10000. The interest rate is 8% per year compounded monthly and your monthly payment is \$300. A) At end of the month when you make a payment, how much of the \$300 is interest owed for the month and how much of it is applied to the balance? B) What is the balance after making the payment? C) What will be the balance after making the payment at the end of the next month? D) Suppose you make payments until your balance is down to \$1000. At the end of the month you make another \$300 payment. How much of that payment goes toward interest and how much goes toward the balance? 2. Suppose you have a balance owed on a home loan of \$150000. The interest rate is 6% per year compounded monthly and your monthly payment is \$1000. A) At end of the month when you make a payment, how much of the \$1000 is interest owed for the month and how much of it is applied to the balance? B) What is the balance after making the payment? C) What will be the balance after making the payment at the end of the next month? D) Suppose you make payments until your balance is down to \$50000.
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