# BONUSanswers - 1 Find monthly payment N= I/Y= PV= PMT FV=...

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1) Find monthly payment N= 360 I/Y= 0.75% PV= -200000 PMT ? \$1,609.25 FV= 0 Now, I want to find how much I paid towards interest. How much have I paid in total after 10 years? \$193,109.43 How much have I paid towards the loan. After 10 years my remaining balance is: \$178,859.49 Which means I've paid \$21,140.51 off of the loan. The other amount must be towards interest payments. \$171,968.92

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Let's look at it two ways TO SOLVE, I KNOW FV at t=? Is equal to 0 or 1st, is to visualize it (not the way to solve, but helps to understand) PV(OUTFLOWS)=PV(INFLOWS) NOTE: EVERYTHING IS IN TERMS OF MONTHS! Time Bbal Cash Flow Interest End Balance I CAN'T SOLVE FOR THE PV OF THE \$50 PAYMENTS t=0 \$1,000.00 \$(50.00) \$- \$950.00 I CAN SOLVE FOR PV OF MONEY I'M PUTTING ON t=1 \$950.00 \$(50.00) \$9.50 \$909.50 THE CARD t=2 \$909.50 \$(50.00) \$9.10 \$868.60 t=3 \$868.60 \$(50.00) \$8.69 \$827.28 I HAVE A 1000 BALANCE PLUS THREE EQUAL PAYMENTS t=4 \$827.28 \$(50.00) \$8.27 \$785.55 THE EQUAL PAYMENTS HAPPEN EACH YEAR SO I NEED t=5 \$785.55 \$(50.00) \$7.86 \$743.41 AN ANNUAL RATE WHICH IS MY EFFECTIVE RATE t=6 \$743.41 \$(50.00) \$7.43 \$700.84 t=7 \$700.84 \$(50.00) \$7.01 \$657.85 EFFECTIVE RATE = 12.6825% t=8 \$657.85 \$(50.00)
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## This note was uploaded on 12/02/2011 for the course FIN 3300 taught by Professor Toddstotnitch during the Fall '11 term at Georgia State.

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BONUSanswers - 1 Find monthly payment N= I/Y= PV= PMT FV=...

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