2 Loan Amount (80) 3 Annual Interest Rate 4 # times per year interest accrued 5 Periodic Rate 6 Term (years) 7 # payments per year 8 Number of payments (N) 9 Balloon (balance after final payment) 10 Points paid at origination to get loan 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 $1,000,000.00 7.66% 12 0.64% 30 12 360 $0.00 AKA "Fully Amortizing" 1.50% t 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Balance in (t): B (t) $1,000,000.00 Interest in (t+1): (i/m)*B_t $6,383.33 Payment in (t+1) $7,102.03 Balance in (t+1): B_(t+1) $999,281.30 Principal paid in (t+1) (=PMT-INT) $718.70
2 Loan Amount (80) 3 Annual Interest Rate 4 # times per year interest accrued 5 Periodic Rate 6 Term (years) 7 # payments per year 8 Number of payments (N) 9 Balloon (balance after final payment) 10 Points paid at origination to get loan 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 $1,000,000.00 7.66% 12 0.64% 30 12 360 $0.00 AKA "Fully Amortizing" 1.50% t 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Balance in (t): B (t) $1,000,000.00 Interest in (t+1): (i/m)*B_t $6,383.33 Payment in (t+1) $7,102.03 Balance in (t+1): B_(t+1) $999,281.30 Principal paid in (t+1) (=PMT-INT) $718.70
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:1
2 Loan Amount (BO)
3 Annual Interest Rate
4
#times per year interest accrued
5
Periodic Rate
6 Term (years)
7 #payments per year
8 Number of payments (N)
9 Balloon (balance after final payment)
10 Points paid at origination to get loan
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$1,000,000.00
7.66%
12
0.64%
30
12
360
$0.00 AKA "Fully Amortizing"
1.50%
t
0
1
2
3
4
5
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9
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Balance in (t): B_(t)
$1,000,000.00
Interest in (t+1): (i/m)*B_t
$6,383.33
Payment in (t+1)
$7,102.03
Balance in (t+1): B_(t+1)
$999,281.30
Principal paid in (t+1) (=PMT-INT)
$718.70
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