0 points) John-Freddi bought a Mercedes would not get cold on the way to those e

Question

0 points) John-Freddi bought a Mercedes would not get cold on the way to those early makin loan was 16% per year with quarterly compoun when he came to Tech as an engineering student (so that his feet paid off in 20 morning classes). The Mcrcedes was purchased by John- made hipcr quarterly payments. The interest rate on the sold thc Mercedes to his and to pay buddy Sam. Sam made John-Freddi unpaid balance by making payment, he got married (too many dates!) an many dates!) and sold the Mercedes to his aning. Afterl6 equal quarterly payments at the same interest rate that oo many dates!) and sold the Rosa pai ecments with John-Freddi's bank to refinance the loa y making 16 equal quarterly payments at trs, at the time that Sam made his 12th payment, Sam flunke e ar to Rosa. Rosa paid the bank $4,000 cash (she had a good ance. What was the amount of John-Freddi's loan to purchase was paying. After 3 out (t summer job!) the Mercedes when it was new?

Explanation / Answer

Assumed Original loan was $100 Principal 100 Interest 4% per quarter N period 20 Instalmment $            7.36 Monthly Mortgage Payment= =(100*4%*(1+4%)^20)/((1+4%)^20-1)           7.3582 Loan Balance After 16th Instalment 17 th interest and principal payment total Instalment              20.00 Less: Already paid (17-1)              16.00 Remaining Instalment (t)                 4.00 Quaterly Payment (PMT)                 7.36 Quaterly Rate of Interest ( r ) 4.0000% PV=PMT*(1-(1+r)/t)/r =7.3582*(1-(1+4%)^-4)/4%          26.7094 Principal          26.7094 Interest 4% per quarter N period 16 Instalmment $            2.29 Monthly Mortgage Payment= =(26.7094*4%*(1+4%)^16)/((1+4%)^16-1)           2.2922 Loan Balance After 12th Instalment 13 th interest and principal payment total Instalment              16.00 Less: Already paid (13-1)              12.00 Remaining Instalment (t)                 4.00 Quaterly Payment (PMT)            2.2922 Quaterly Rate of Interest ( r ) 4.0000% PV=PMT*(1-(1+r)/t)/r =2.2922*(1-(1+4%)^-4)/4%            8.3204 If principal was 100 than remaining balanace was 8.3204 If principal was 1 than remain balamnce was 8.3204/100 if remaing was 4000 than principal was =4000/(8.3204/100)           48,075

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