A young couple buying their first home borrow $80,000 for 30 years at 7.1%, compounded monthly, and make payments of $537.63. 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 $537.63 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.)
A young couple buying their first home borrow $80,000 for 30 years at 7.1%, compounded monthly, and make payments of $537.63. 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 $537.63 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.)
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
Solve (a),(b),(c),(d) part only
Transcribed Image Text:A young couple buying their first home borrow $80,000 for 30 years at 7.1%, compounded monthly, and make payments
of $537.63. 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 $537.63 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
(b). Round your answer to the nearest cent.)
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!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 4 images
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.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education