13. A recent college graduate borrows $100,000 at an interest rate of 9% to purchase acondominium. Anticipating steady salary increases, the buyer expects to make payments at amonthly rate of 800(1+t/120), where t is the number of months since the loan was made.(a) Assuming that this payment schedule can be maintained, when will the loan be fully paid?(b) Assuming the same payment schedule, how large a loan could be paid off in exactly 20 years?

Answered: Image /qna-images/answer/875d7eab-0862-485f-a6fb-e8b7954447fa.jpg

Answered: 13. A recent college graduate borrows…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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James has an investment worth $175,609.50. The investment will make a special payment of X to James in 1 month from today and the investment also will make regular, fixed monthly payments of $1,440.00 to James forever. The expected return for the investment is 1.23 percent per month and the first regular, fixed monthly payment of $1,440.00 will be made to James in one month from today. What is X, the amount of the special payment that will be made to James in 1 month? An amount less than $58,600.00 or an anmount greater than $179,600.00 An amount equal to or greater than $58,600.00 but less than $88,950.00 An amount equal to or greater than $88,950.00 but less than $146,400.00 An amount equal to or greater than $146,400.00 but less than $176,000.00 O An amount equal to or greater than $176,000.00 but less than $179,600.00 Com SHEMA
A finance company offers a promotion on $8900 loans. The borrower does not have to make any payments for the first 4 years, however interest will continue to be charged to the loan at 24.6 % compounded continuously. a) What amount will be due at the end of the 4 years, assuming no payments are made? $ (Rounded to the nearest cent). b) If the promotion is extended an additional 4 years, and no payments are made, what amount will be due? S (Rounded to the nearest cent).
The annuity will run out of funds after approximately 13 years 10 months. (b) Show that a continuous annuity with withdrawal rate N = $5000/year and interest rate r = 8%, funded by an initial deposit of P0 = $75,000, never runs out of money.
Emma wants to donate $1,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of j4=2.47% p.a. effective and the first scholarship will be first awarded 2.5 years after the date of the donation. (b) Assume that the fund's earnings rate rate has changed from j4=2.47% to j4=2.22% one year before the first scholarship payment. How much does Emma need to add to the fund at that time (one year before the first scholarship payment) to ensure that scholarship amount will be unchanged (rounded to two decimal places)? a. 120871.62 b. 117931.61 c. 116810.57 d. 113655.15
2. (2 pts) At an effective annual interest rate i, you are given: (a) the present value of an annuity-immediate with annual payments of 1 for n years is 40; and (b) the present value of an annuity-immediate with annual payments of 1 for 3n years is 70. Calculate the accumulated value of an annuity-immediate with annual payments of 1 for 2n years. Solution:
3. A loan of KD 20000 is to be repaid in semi-annual payments over a period of ten years. The value of each payment during the first three years is twice the value of the payment during the last 7 years. The interest rate is 12% compounded continuously for the first 4 years, and 8% compounded semiannually for the last six years. Calculate: a) Values of the payments for the first 3 years and the last 7 b) The remaining balance after making the 10th payment. years.
Determine the outstanding principal of the given mortgage. (Assume monthly interest payments and compounding periods.) HINT [See Example 7.] a $100,000, 25-year, 4.3% mortgage after 10 years Step 1 Note that this question asks us to find the outstanding principal, after the first 10 years, on a 25-year, $100,000 mortgage. The present value formula can be used to calculate the outstanding principal on a mortgage, but to use this formula, the monthly payment on the mortgage must be known. To calculate the monthly payment PMT on a mortgage valued at PV dollars for n periods at an interest rate of i per period, use the formula PMT = PV The given mortgage is $100,000, so PV = 100000 The 4.3% annual interest rate as a decimal is 0.043, so the monthly interest rate is i = 12 Step 2 With PV = 100,000, i = If the investment is for 25 years with monthly payments, then the number of pay periods is n = 25. 12 = 300 nearest cent. PMT = PV PMT = = 1 − (1 + i)¯″¸ 100000 0.043 and n = "I 12 544.54…

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