LOAN AMORTIZATION AND EAR You want to buy a car, and a local bank will lend you
ID: 2820558 • Letter: L
Question
LOAN AMORTIZATION AND EAR
You want to buy a car, and a local bank will lend you $40,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 9% with interest paid monthly.
What will be the monthly loan payment? Do not round intermediate steps. Round your answer to the nearest cent.
$
What will be the loan's EAR? Do not round intermediate steps. Round your answer to two decimal places.
%
How much principal will be repaid in the second year on a 20-year, $60,000 mortgage requiring annual payments and a 10% annual interest rate?
e. $5,895.24
EFFECTIVE INTEREST RATE
You borrow $320,000; the annual loan payments are $36,807.87 for 30 years. What interest rate are you being charged? Round your answer to two decimal places.
%
If you would like to accumulate $7,500 over the next 5 years, how much must you deposit each six months, starting six months from now, given a 6% interest rate and semiannual compounding?
a. $1,725.70 b. $7,047.58 c. $1,047.58 d. $1,152.34e. $5,895.24
EFFECTIVE INTEREST RATE
You borrow $320,000; the annual loan payments are $36,807.87 for 30 years. What interest rate are you being charged? Round your answer to two decimal places.
%
If you would like to accumulate $7,500 over the next 5 years, how much must you deposit each six months, starting six months from now, given a 6% interest rate and semiannual compounding?
a. $ 879.23 b. $ 654.23 c. $1,330.47 d. $ 569.00 e. $ 732.67Explanation / Answer
a) The Monthly loan repayment EMI for 60 months is USD 846.28. (Calculaion is shown below)
b)
Answer 2)
So principal repayment in 2nd year is USD1425.39
Answer 3) The ROI charged annually is 9.18%. The assumption considered is that loan repayment of USD36807.7 is EMI which includes principal and Interest payment.
Answer 4) The Correct answer is USD 716.75. The total number of period will be 9. The Number of period for which first installment is invested is 9, second would be 8.......and so on.
Principal 40000.00 Interest rate 9.00% EMI 846.28 Month Present value of EMI Principal at beginning Monthly Interest Principal at end 1 839.98 40000.00 300.00 39453.72 2 833.72 39453.72 295.90 38903.35 3 827.52 38903.35 291.78 38348.85 4 821.36 38348.85 287.62 37790.19 5 815.24 37790.19 283.43 37227.34 6 809.17 37227.34 279.21 36660.27 7 803.15 36660.27 274.95 36088.95 8 797.17 36088.95 270.67 35513.34 9 791.24 35513.34 266.35 34933.42 10 785.35 34933.42 262.00 34349.14 11 779.50 34349.14 257.62 33760.49 12 773.70 33760.49 253.20 33167.41 14 762.22 33167.41 248.76 32569.89 15 756.55 32569.89 244.27 31967.89 16 750.92 31967.89 239.76 31361.38 17 745.33 31361.38 235.21 30750.31 18 739.78 30750.31 230.63 30134.66 19 734.27 30134.66 226.01 29514.40 20 728.80 29514.40 221.36 28889.48 21 723.38 28889.48 216.67 28259.88 22 717.99 28259.88 211.95 27625.55 23 712.65 27625.55 207.19 26986.47 24 707.34 26986.47 202.40 26342.59 25 702.08 26342.59 197.57 25693.88 26 696.85 25693.88 192.70 25040.31 27 691.66 25040.31 187.80 24381.84 28 686.52 24381.84 182.86 23718.43 29 681.40 23718.43 177.89 23050.04 30 676.33 23050.04 172.88 22376.64 31 671.30 22376.64 167.82 21698.19 32 666.30 21698.19 162.74 21014.65 33 661.34 21014.65 157.61 20325.99 34 656.42 20325.99 152.44 19632.16 35 651.53 19632.16 147.24 18933.12 36 646.68 18933.12 142.00 18228.85 37 641.87 18228.85 136.72 17519.29 38 637.09 17519.29 131.39 16804.41 39 632.35 16804.41 126.03 16084.16 40 627.64 16084.16 120.63 15358.52 41 622.97 15358.52 115.19 14627.43 42 618.33 14627.43 109.71 13890.86 43 613.73 13890.86 104.18 13148.77 44 609.16 13148.77 98.62 12401.11 45 604.62 12401.11 93.01 11647.84 46 600.12 11647.84 87.36 10888.93 47 595.65 10888.93 81.67 10124.32 48 591.22 10124.32 75.93 9353.97 49 586.82 9353.97 70.15 8577.85 50 582.45 8577.85 64.33 7795.91 51 578.11 7795.91 58.47 7008.11 52 573.81 7008.11 52.56 6214.39 53 569.54 6214.39 46.61 5414.73 54 565.30 5414.73 40.61 4609.06 55 561.09 4609.06 34.57 3797.35 56 556.91 3797.35 28.48 2979.56 57 552.77 2979.56 22.35 2155.63 58 548.65 2155.63 16.17 1325.52 59 544.57 1325.52 9.94 489.19 60 540.52 489.19 3.67 492.86Related Questions
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