adms_3530_assignment_1_fall_2012_solution

050522503 calculating monthly payment 1 1 1 300000 1

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Unformatted text preview: emaining number of payments = 300 – 60 = 240 Calculating remaining balance at the end of year 5 (That is, the present value of the last 240 payments). 240 0 0.004115752 $1743.11 ?? 1 1 1 $1743.11 1 0.004115752 1 0.004115752 1.004115752 $1743.11 152.3031472 $265,481.14 Over the first 5 years (n = 60) Total Payment = $1743.11 60 $104586.60 Amount of principal paid = 300,000 265,481.14 345,18.86 Total Interest Paid = Total Payment – Amount of principal paid Total Interest Paid = $104586.60 $34518.86 $70,067.74 Interest Savings: Total Interest Paid (fixed) - Total Interest Paid (variable) 27043.84 $70,067.74 $43023.98 Page 8 of 18 Difference in amount owing: Outstanding balance at the end of 5 years (Fixed) - Outstanding balance at the end of 5 years (Variable) $265,481.14 $256,913.78 $8567.36 Page 9 of 18 #4a) #4b) First we comp...
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