1) A couple purchases a vacation home for 280,000. They pay 20% down and finance

Question

1) A couple purchases a vacation home for 280,000. They pay 20% down and finance the rest with equal monthly payments at the end of each month over 30-year period at a rate of 6.5% compounded monthly. How much interest will the couple pay on this loan?

2) A person deposits 2215 at the beginning of each semiannual period for 8 years into an account paying 5% compounded semiannually. Then, he leaves that money alone, with no further deposits, for an additional 6 years. Find the final amount in this account after 14 years.

3) Large semitrailer trucks cost 72000 each. A trucking company busy 3 of these trucks and agrees to pay for them with a loan that is amortized with 9 semiannual payments at 10% compounded semiannually. What is the total amount (principal + interest) paid for this loan?

PS: show all steps

Explanation / Answer

total loan=0.8*280000=224000

now PV of all future payments at 0.065/12=224000

x*(1/0.0055-(1/0.0054*(1.0054^30*12)))=224000

158.05*x=224000

x=1417.24

interest=1417.24*360-224000=286206.83

b)Fv after 8 yrs at .05/2=((1.025^16)-1)*2215/.025=42927.49

Fv after 6 yrs=42927.49*(1.05)^6=57526.55

c)72000*3=x*(1/.05-1/0.005*(1.005^9))

x*7.10=72000*3

x=30389

total amount paid=273501.5

interest=273501.5-216000=57501

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