Homework Answers
| A) | Monthly payment (using formula for loan amortization) = 286819*(0.09/12)*(1+0.09/12)^348/((1+0.09/12)^348-1)) = | $ 2,323.69 |
| B) | Monthly payment (using formula for loan amortization) = 190372*(0.08/12)*(1+0.08/12)^360/((1+0.08/12)^360-1)) = | $ 1,396.88 |
| Interest on the first installment = 190372*0.08/12 = | $ 1,269.15 | |
| Portion of installment = 1269.15/1396.88 = | 90.86% | |
| C) | Monthly payment (using formula for loan amortization) = 495186*(0.09/12)*(1+0.09/12)^300/((1+0.09/12)^300-1)) = | $ 4,155.58 |
| Outstanding balance after 8 years is the PV of the remaining installments = 4155.58*((1+0.09/12)^204-1))/((0.09/12)*(1+0.09/12)^204)) = | $ 4,33,412.92 |
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3, Jimmy takes out a $50,000 mortgage on a home at a 5.6% interest rate convertible monthly. He plans to pay off the mortgage with monthly payments for 20 years. Immediately following the 60h payment, he renegotiates the loan. He agrees to make a cash payment of $7500 and will pay the remaining balance with monthly payments over 10 years at a rate of 4.1% convertible monthly. Calculate his new monthly payment.
show the work on a
calculator
A borrower takes-out a fully amortizing loan for $1,000,000. The term of the loan is 30 years. The initial interest is 6% APR, compounded monthly. After one year, the interest rises to 8% APR, compounded monthly. After two years, the interest falls back to 6% APR, compounded monthly. After three years, the interest further falls to 4% APR, and it remains at 4% APR for the rest of the loan term Part A What...
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