Chapter 5 lecture

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Unformatted text preview: take to pay off the loan 34 How long will it take to How pay off a loan? pay A HOW LONG 1 2 Loan amount 3 Interest rate 4 Annual payment 5 6 7 8 9 10 11 12 13 Year 1 2 3 4 5 6 7 B C D E TO PAY OFF THIS LOAN? 10,000 7.5% 2000 Principal Payment beginning at end of Return of of year year Interest principal 10,000.00 2,000.00 750.00 1,250.00 8,750.00 2,000.00 656.25 1,343.75 7,406.25 2,000.00 555.47 1,444.53 5,961.72 2,000.00 447.13 1,552.87 4,408.85 2,000.00 330.66 1,669.34 2,739.51 2,000.00 205.46 1,794.54 944.97 2,000.00 70.87 1,929.13 • 6<n<7 35 How long will it take to How pay off a loan? pay – Alternatively, we can use the NPER function 36 How long will it take to How pay off a loan? pay • Question: – How long does it take to pay off a credit How card with an $8,000 balance by making the monthly minimum payment of $150? monthly – Interest rate on the card is 12% per year Interest (or 1% per month) (or 37 5.6. Buying a car for Mario – Mario wants to know how much he needs Mario to save per year in order to buy a $20,000 car in two years car – “the future consumption plan is fully funded the fully if the net present value of all the cash flo...
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This document was uploaded on 02/09/2014.

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