Exam1 Solution

# Exam1 Solution - 0.75 No of Monthly Payment \$241.66 \$412.37...

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Bank A Bank B Loan Amonut \$10,000.00 \$10,000.00 Each payment \$2,571.00 \$207.58 No. of Payments 5 60 Int. per period 9.00% 0.75% Effective Rate 9.38% Use RATE function Use EFFECT function (or program the formula in the c

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i= 6% g= 4% EOY CF 0 1000 \$3,214.96 1 200 2 200 \$14,626.09 3 200 4 200 5 200 6 200 7 208.0 Use formula for geometric gradient from EOY 7 to 10 8 216.3 9 225.0 10 234.0 11 0 12 0 13 0 14 500 15 0 16 0 17 500 18 0 19 0 20 500 21 0 22 0 23 500 24 25 26 Use NPV function Need FV at EOY 26 corresponding to value at EOY 0

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Part (a): Parents Bank Cost of House \$75,000.00 Loan from Parents \$12,500.00 Cash available \$11,250.00 Total down payment \$23,750.00 Loan from Bank \$51,250.00 Nominal rate 6.00% 9.00% Interest per month 0.50%
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Unformatted text preview: 0.75% No. of payments 60 360 Monthly Payment \$241.66 \$412.37 TOTAL monthly payment \$654.03 Add both payments Part (b): Monthly payment \$400.00 Months to pay off loan 34.06 Use PMT function Use NPER function Part (a): Loan amount \$20,000.00 Nominal rate 12% Payment frequency Monthly No. of Payments 48 Monthly Payment \$526.68 Part (b): Loan fee 4% Actual Loan Amount \$19,200.00 Compute actual loan amount Monthly Payment \$526.68 Interest per month 1.18% Effective Rate 15.17% Use PMT function Use RATE function Use EFFECT function or program formula...
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## This test prep was uploaded on 04/07/2008 for the course IME 3100 taught by Professor Kailashbafna during the Spring '07 term at Western Michigan.

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Exam1 Solution - 0.75 No of Monthly Payment \$241.66 \$412.37...

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