A couple who borrow $70,000 for 15 years at 6%, compounded monthly, must make monthly payments of $590.70. (Round your answers to the nearest cent.) (a) Find their unpaid balance after 1 year. (b) During that first year, how much interest do they pay?

A couple who borrow $70,000 for 15 years at 6%, compounded monthly, must make monthly payments of $590.70. (Round your answers to the nearest cent.) (a) Find their unpaid balance after 1 year. (b) During that first year, how much interest do they pay?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter5: Introduction To Business Expenses

Section: Chapter Questions

Problem 61P

See similar textbooks

Related questions

Q: Suppose a recent college graduate's first job allows her to deposit $150 at the end of each month in…

A: Future value of annuity = P * [ (1+r)^n - 1 ] /r Where, r =rate of return per period i.e. 6%/12 =…

Q: The Flemings secured a bank loan of $368,000 to help finance the purchase of a house. The bank…

A: Calculation for the size of each repayment if loan is to be amortized at the completion of the term:…

Q: Bryan received a loan of $42,000 from the bank at 3.25% compounded monthly. If she had to repay $350…

A: Given that: Interest rate r = 3.25% per year = 0.2708% per month Period n =3 year= 36 months…

Q: Today, a businessman borrowed money to be paid in 10 equal quarterly payments starting at the end 2…

A: The amount borrowed can be calculated as the present value of quarterly payments, The present value…

Q: A woman paid $98,000 down for a house and agreed to pay 18 quarterly payments of $4,100 each. If…

A: The present value of an annuity is the current worth of a series of cash flows at a certain rate of…

Q: Jesse received a loan of $26,000 from the bank at 5.50% compounded monthly. If he had to repay $300…

A: First we need to find the total tenure of loan. Loan amount = PV of instalments PV = E(1-(1+r)-p)/r…

Q: A couple who borrow $60,000 for 25 years at 6%, compounded monthly, must make monthly payments of…

A: Calculate the interest amount for first year as follows: Interest = Amount * Interest rate Interest…

Q: Suntech Distributors, Inc., deposits $4,000 at the beginning of each 3-month period for 7 years in…

A: Formula: A = P [ 1 + ( r / N )NT ] Interest : Interest is a fee charged on the borrowed amount.

Q: n order to accumulate enough money for a down payment on a house, a couple deposits $769 per month…

A: using excel PV and FV function =PV(rate,nper,pmt,[fv]) =FV(rate,nper,pmt,[pv]) Where, rate = rate…

Q: Prisha received a loan of $25,000 from the bank at 3.50% compounded monthly. If she had to repay…

A: Solution:- When an amount is borrowed, it can either be repaid as a lump sum payment or in…

Q: Abigail received a loan of $41,000 from the bank at 5.75% compounded monthly. If she had to repay…

A: Using Excel

Q: In order to accumulate enough money for a down payment on a house, a couple deposits $ 234 per…

A: Here, The future value is "FV". The periodic payments are "P". The interest rate is "r". The…

Q: Kim Baker invested $250 at the end of every 3-month period, for 5 years, at 8% interest compounded…

A: If money has been deposited in an account at the beginning of every period for a specified duration…

Q: If Rochelle obtained a business loan of $205,000.00 at 4.67% compounded semi-annually, how much…

A: Business loan = $205,000.00 Interest Rate = 4.67% compounded semi-annually Time Period = 30 Years

Q: Suppose a young couple deposits $700 at the end of each quarter in an account that earns 7.2%,…

A: Here, Deposit for the first three years is $700 per quarter Deposit after three years for the next…

Q: A couple who borrow $60,000 for 15 years at 8.4%, compounded monthly, must make monthly payments of…

A: Loan is a value which is borrowed from external sources like banks and this amount is repaid later…

Q: A woman borrowed P3, 000, 000 to be paid after 1.5 years with interest at 12% compounded…

A: Solution:- When an amount is invested somewhere, it earns interest on it. The amount initially…

Q: The owner of Sebastopol Tree Farm deposits $450 at the end of each quarter into an account paying…

A: Future value of a present value is the value of that amount after taking into account the time value…

Q: A) Suppose a young couple deposits $700 at the end of each quarter in an account that earns 7.6%,…

A: Future Value: The value of any asset at some future date which is computed using an assumed rate of…

Q: You are to pay a bill in Meralco every month for 5 years. The accumulated amount of the payment you…

A: The concept of the time value of money states that the current worth of money is more than its value…

Q: A couple who borrow $80,000 for 15 years at 7.2%, compounded monthly, must make monthly payments of…

A: A loan is a financial arrangement in which one or more people, companies, or other entities lend…

Q: How much will be owed at the end of 5 years?

A: Time value of money means the amount of received in the present period will have more value than…

Q: A couple who borrow $70,000 for 20 years at 7.2%, compounded monthly, must make monthly payments of…

A: a) Unpaid Balance= Beginning balance - principal repayment

Q: A young executive is going to purchase a vacation property for investment purposes. She needs to…

A: Amount Borrowed =$85,000.00 Interest Rate = 6.5% = 6.5/12 = 0.54167% Years = 29 Terms = 29*12 = 348…

Q: A woman, with her employer's matching program, contributes $600 at the end of each month to her…

A: The Future Value of the annuity is the total value of all the payments which is occurred regularly…

Q: Ma. Nochna Pula borrowed $10,000 at 6% annual compound interest. She agreed to repay the loan with…

A: Annual payment can be calculated using the present value of annuity formula. Present value of…

Q: A young executive is going to purchase a vacation property for investment purposes. She needs to…

A: Introduction: Compound interest is the interest generated on the initial principle plus the interest…

Q: In order to accumulate enough money for a down payment on a house, a couple deposits $623 per month…

A: FUTURE VALUE OF ANNUITY IS THE GROUP OF RECUURING CASHFLOW COMPOUNDED TO FUTURE DATE. GIVE, A= $623…

Q: To help finance the purchase of a house and lot, a couple borrows P350,000. The loan is to be repaid…

A: Given Information : Amount borrowed = P350,000 Number of years = 8 Annual interest rate = 15%

Q: What is the value of the account at the end of 9 years?

A: Depositing equal amounts at the end of the period for a fixed time period is in the form of an…

Q: To help finance the purchase of a house and lot , a couple borrows P350,000. The loan is to be…

A: The interest rate is the proportion of a loan that is charged as interest to the borrower. It is the…

Q: At the end of each quarter, Patti deposits $1,600 into an account that pays 12% interest compounded…

A: Deposit amount = $1600 Interest = 12% Compounding = Quarterly Quarterly interest rate = 12%/4 = 3%…

Q: In order to accumulate enough money for a down payment on a house, a couple deposits $551 per month…

A: Given, Amount of deposit is $551 every month Interest rate is 3% compounded monthly Term is 5 years

Q: A woman paid $92,000 down for a house and agreed to pay 18 quarterly payments of $4,200 each. If…

A: Given:

Q: At the end of each quarter, Patti deposits $1,800 into an account that pays 10% interest compounded…

A: Future Value of Annuity = Present Value x [{(1 + i)n - 1} / i]

Q: Carlos purchased a house for $230,000; he paid $11500 as a down payment and financed the balance…

A: Value of House is $230,000 Down Payment is $11,500 Therefore, Loan Amount is : =$230,000-$11,500…

Q: In order to accumulate enough money for a down payment on a house, a couple deposits $273 per month…

A: Compounded monthly- In the actual world, interest is often compounded more than one time a year. In…

Q: small business owner contributes $2,000 at the end of each quarter to a retirement account that…

A: Information Provided: Amount to be contributed = $2000 Interest = 10% compounded quarterly

Q: a) Parents wish to provide $40,000 for their child to assist with her education. They deposit $200…

A: Future Value Required = 40,000 Deposit = 200 End of month deposits Monthly Compounding, Number of…

Q: A couple who borrow $70,000 for 15 years at 8.4%, compounded monthly, must make monthly payments of…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: The owner of Oak Hill Squirrel Farm deposits $2,000 at the end of each quarter into an account…

A: Quarterly deposit (P) = $2,000 Interest rate = 1.5% Quarterly interest rate (i) = Interest rate/4 =…

Q: An uncle has deposited $10,000 into an account that is paid quarterly at an annual rate of 2%. The…

A: The present value of the annuity is the current worth of a cash flow series at a certain rate of…

Q: Marissa converted an RRSP balance of $125,000 into an RRIF that will pay he $1,850 at the end of…

A: Future Value: The future value is the amount that will be received at the end of a certain period.…

Q: A small business owner contributes $3,000 at the end of each quarter to a retirement account that…

A: Given information: Quarterly payment $3,000 Interest rate 10% compounded quarterly Future value is…

Q: A couple who borrow $100,000 for 30 years at 8.4%, compounded monthly, must make monthly payments of…

A: Loan amount is $100,000 Time period is 30 years Interest rate is 8.4% Monthly payment is $761.84

Q: Mr. Nina borrows $425,000 from the bank at 3.5% per year interest over a 30-year period. He can make…

A: Amount borrowed = $425000 Interest rate = 3.5% Period = 30 years Monthly payment = $1400

Q: In 5 years a couple would like to have $25,000 for a down payment on a house. What fixed amount…

A: Given: Accumulated amount (A)=$25000compound interest rate (r)=9%No. of times compounded in a year…

Q: A couple who borrow $70,000 for 15 years at 8.4%, compounded monthly, must make monthly payments of…

A: remaining balance formula: remaining balance=pv×1+rmn-pmt×1+rmn-1rm where, pv =principal PMT =…

Question

A couple who borrow $70,000 for 15 years at 6%, compounded monthly, must make monthly payments of $590.70. (Round your answers to the nearest cent.)

(a) Find their unpaid balance after 1 year.

(b) During that first year, how much interest do they pay?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Samuel Ames owes 20,000 to a friend. He wants to know how much he would have to pay if he paid the debt in 3 annual installments at the end of each year, which would include interest at 14%. Draw a time line for the problem. Indicate what table to use. Look up the table value and place it in a brief formula. Solve.
A couple who borrow $70,000 for 15 years at 8.4%, compounded monthly, must make monthly payments of $685.22. A) Find their unpaid balance after 1 year. (Round your answers to the nearest cent.) B) During that first year, how much do they pay towards the principle? (Round your answer to the nearest cent.) C) During that first year, what are their total payments? (Round your answer to the nearest cent.) D) During that first year, how much interest do they pay? (Round your answer to the nearest cent.)
A couple who borrow $100,000 for 15 years at 7.2%, compounded monthly, must make monthly payments of $910.05. (Round your answers to the nearest cent.) (a) Find their unpaid balance after 1 year.$(b) During that first year, how much interest do they pay?$
A couple who borrow $70,000 for 15 years at 8.4%, compounded monthly, must make monthly payments of $685.22. (a) Find their unpaid balance after 1 year. (Round your answers to the nearest cent.) $ (b) During that first year, how much do they pay towards the principle? (Round your answer to the nearest cent.) $ During that first year, what are their total payments? (Round your answer to the nearest cent.) $ During that first year, how much interest do they pay? (Round your answer to the nearest cent.) $
In order to accumulate enough money for a down payment on a house, a couple deposits $551 per month into an account paying 3% compounded monthly. If payments are made at the end of each period, how much money will be in the account in 5 years? What is the amount in the account after 5 years? $ (Round to the nearest cent as needed.)
A couple borrows $935,000 for 7 years for the purchase of a vacation home at interest rate of 7 percent. The loan requires that the interest and principle be paid in equal, annual payments. The interest is determined on the declining balance that is owed. What are the required annual payments on the loan? How much is the principal loan balance reduced by during the first year?
In order to accumulate enough money for a down payment on a house, a couple deposits $ 234 per month into an account paying 3% compounded monthly. If payments are made at the end of each period, how much money will be in the account in 7 years? Type the amount in the account: (Round to the nearest dollar.)
A woman borrows $3000 at %9 compounded monthly, which is to be amortized over 3 years in equal monthly payments. For tax purposes, she needs to know the amount of interest paid during each year of the loan. Find the interest paid during the first year, the second year, and the third year of the loan. (Hint: Find the unpaid balance after 12 payments and after 24 payments. Also see example in your notes.)
In order to accumulate enough money for a down payment on a house, a couple deposits $668 per month into an account paying 6% compounded monthly. If payments are made at the end of each period, how much money will be in the account in 6 years? Type the amount in the account: $ (Round to the nearest dollar.)
A young executive is going to purchase a vacation property for investment purposes. She needs to borrow $91,000.00 for 29 years at 6.3% compounded monthly. (Round all answers to the nearest cent.) a) What is the monthly payment amount? b) What is the unpaid balance after 10 months? c) During this time period, how much interest did she pay?
A young couple buying their first home borrow $90,000 for 30 years at 7.4%, compounded monthly, and make payments of $623.14. After 2 years, they are able to make a one-time payment of $2,000 along with their 24th payment. (a) Find the unpaid balance immediately after they pay the extra $2,000 and their 24th payment. (Round your answer to the nearest cent.) (b) How many regular payments of $623.14 will amortize the unpaid balance from part (a)? Give the answer to one decimal point. payments(c) How much will the remaining debt be after the number of full payment periods in part (b) is made? (Round your answer to the nearest cent.) How much extra must be included with the last full payment to pay off the debt? (Round your answer to the nearest cent.)(d) How much will the couple pay over the life of the loan by paying the extra $2,000? (Round your answer to the nearest cent.)(e) How much will the couple save over the life of the loan by paying the extra $2,000? (Use your answer from part…
A young couple buying their first home borrow $90,000 for 30 years at 7.6%, compounded monthly, and make payments of $635.47. After 4 years, they are able to make a one-time payment of $2,000 along with their 48th payment. (c) How much will the remaining debt be after the number of full payment periods in part (b) is made? (Round your answer to the nearest cent.)$ How much extra must be included with the last full payment to pay off the debt? (Round your answer to the nearest cent.)$ (d) How much will the couple pay over the life of the loan by paying the extra $2,000? (Round your answer to the nearest cent.)$ (e) How much will the couple save over the life of the loan by paying the extra $2,000? (Use your answer from part (b). Round your answer to the nearest cent.)