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Comprehensive Problem

# Comprehensive Problem - Comprehensive Problem Roseanne...

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Comprehensive Problem Roseanne wants to borrow \$40,000 for a period of 5 years. The lender offers 10% and her a choice of three payment structures: Pure Discount Pay all interest and principal in one lump sum at the end of 5 years. 1

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Comprehensive Problem Roseanne wants to borrow \$40,000 for a period of 5 years. The lender offers 10% and her a choice of three payment structures: 2 Option 1 – Pure Discount Enter 5, then N Enter 10, then I/Y Enter 40000, then +/-, then PV Enter 0, then PMT Enter CPT , then FV \$64,420 Interest = \$64,420 - \$40,000 = \$24,420
Amortizing Loans– Multiple Step Example You want to purchase a \$170,000 house. You can put 10% down. The rate is 7.75% APR for a 30-year fixed rate loan. 3

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You want to purchase a \$170,000 house. You can put 10% down and make monthly payments. The rate is 7.75% APR for a 30-year fixed rate loan. 4
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Comprehensive Problem - Comprehensive Problem Roseanne...

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