learn.instructure.com/courses/1293548/quizzes/secured #lockdown 10 pts Question

Question

learn.instructure.com/courses/1293548/quizzes/secured #lockdown 10 pts Question 7 of $719.46. If the current value is $59,926.34, how many years will it take to fully amortize to a zero balance? Consider a mortgage (or annuity) with a fixed interest rate of 6% and a constant monthly payment 5 years O 6 years O 7 years O 8 years O 9 years 10 pts D Question 8 What would the value of an investment be if you were promised a 12% return with $1,000 monthly payments for 15 years and a lump sum paid at the end of $500,000? 3 $166,713 s150035 O $282.496 $340,748 $247,680 DQuestion 9 10 pts

Explanation / Answer

Answer to Question 7:

Current Value = $59,926.34
Annual Interest Rate = 6%
Monthly Interest Rate = 0.50%
Monthly Payment = $719.46

Let it will take n months to amortize this loan

$59,926.34 = $719.46 * PVIFA(0.5%, n)

Using financial calculator:
I = 0.5
PV = -59926.34
PMT = 719.46
FV = 0

N = 108

Number of months = 108
Number of years = 108 / 12 = 9 years

Answer to Question 8:

Annual Interest Rate = 12%
Monthly Interest Rate = 1%
Monthly Payment = $1,000
Lump sum payment at the end of year 15 = $500,000
Period = 15 years or 180 months

Value of Investment = $1,000 * PVIFA(1%, 180) + $500,000 * PVIF(1%, 180)
Value of Investment = $1,000 * (1 - (1/1.01)^180) / 0.01 + $500,000 / 1.01^180
Value of Investment = $166,713

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.