1.Find i (the rate per period) and n (the number of periods) for the following l
ID: 3110844 • Letter: 1
Question
1.Find i (the rate per period) and n (the number of periods) for the following loan at the given annual rate. Monthly payments of $243.05 are made for 33 years to repay a loan at 6.75% compounded monthly.
2.Find i (the rate per period) and n (the number of periods) for the following loan at the given annual rate. Semiannual payments of 5,000 are made for 12 years to repay a loan at 7.85% compounded semiannually.
3.Solve the following problem. n=20; I =0.039; PMT=$200; PV =?
4.Solve the following problem. PV=$26,164; n=65; i=0.012; PMT= ?;
5.Use the formula for the present value of an ordinary annuity or the amortization formula to solve the following problem. PV =$7,000; I = 0.01; PMT $550; n=?
6.Use the formula for the present value of an ordinary annuity or the amortization formula to solve the following problem. PV=$9,000; PMT=$600; n=30; I =?
7.American General offers a 88-year annuity with a guaranteed rate of 9.15% compounded annually. How much should you pay for one of these annuities if you want to receive payments of $1500 annually over the 8 year period? How much should a customer pay for this annuity?
8.E-Loan, an online lending service, recently offered 48-month auto loans at 4.8% compounded monthly to applicants with good credit ratings. If you have a good credit rating and can afford monthly payments of $452, how much can you borrow from E-Loan? What is the total interest you will pay for this loan?
9.If you buy a computer directly from the manufacturer for $2,425 and agree to repay it in 48 equal installments at 1.59% interest per month on the unpaid balance, how much are your monthly payments? How much total interest will be paid?
10.A sailboat costs $18,674. You pay 10% down and amortize the rest with equal monthly payments over a 8-year period. If you must pay 6.9% compounded monthly, what is your monthly payment? How much interest will you pay?
Explanation / Answer
Solution:
Solution:
Monthly deposits of $243.05
Payment = $ 243.05
It is made for 33 years into an annuity that pays 6.75% compounded monthly
time t = 33 year
rate = 6.75 % = 0.0675 compunded monthly
therefore number of period = 12
effective rate per period i = r/n = 0.0675/12 = 5.625 x 10-3
Total number period of payment = 33x12 = 396
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