5. Tonya finances $27,000 at 7% (per yr.) for 7 years. The monthly payment is $407.50.(a) The first payment includes $157.50 interest. How much principal is in the 1" payment?407.50-157.50-250(b) Find the new loan balance after the 1" payment if the payment was on time.27,000250 = 26,750(c) Use /- Prr to find the interest in the 2nd payment if the 1" payment was on time.26.750 x 0.07T2 = 156.04(d) How many monthly payments are scheduled? If all payments are made as scheduled,what is the total interest paid?7x12=8484 x 467.50 -27,000 = 7,230(e) Slightly increasing the payment to $460.32 per month will pay off the loan in 72payments. How much interest is saved to the nearest dollar?

Loans are paid by equal monthly payments and these payments carry the payment for interest and…

Answered: (a) The first payment includes $157.50…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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