Question

Problem Set 1. A man is paying off a debt of $15,000 with regular payments of $300 at the end of each month. Annual interest is 18% compounded monthly. (a) Find the exact amount of time to at least five decimal places that it will take to pay off this loan. (b) Determine the size of the balloon payment to be made to pay off the loan at the time of the last regular payment. (c) Determine the size of the drop payment which would have to be made one month after the last regular payment. d) How long would it take to pay off the original debt of $15,000 if the payment at the end of each month were $225?

Answer 1

Pg No-0 Solution : 6 Given cata: • Aman is paying off a debt of $15,000 • Regular Payments = $300 • Annual Interest = 18.4. A). The exact Amount of time to at least 6 decimal places that it will take to pay off this loan in → 300 CPA', 15.)., n) = 15000 > 300 [1- 1.0151", i= 18/17 = 15% 1015 - 1500D = [(1 - 10157 [ 100151 ='50 => (1.015) "50125 Now, n=[in 10.25) 7 Lin(1095) n. 93.1105 93

B) The Size of the Ballon payment to be made to .. to Pg No - Pay aff the loan at the time of last Regular Payment. Ballon Payment = 300 * 1111105 = 333:315 c). Rup payments formula = Bill Payment – Regular Payments of each month = 333.315 - 300 = 33.315 D) if How long would it take to pay off the original debt of $15,000 payment at the End of each month were $225: . . → 225 CVA, 15%, n) = 15000 0.015 > 2255 1-(1.015)nya 7 0057 = 15000 1 - 15000 => 71-(1.015) "7 1 0.015 (0.016° 66.6667 = 66667 (1015)" =D Ī As per Chigg Rules I Can Answer 1st The Solution is Intermediate, Question only") -