Exactly 5 years ago, a loan was taken out that was to be repaid by level annual instalments made inarrears over a 15-year contract. Given that the instalments (of capital and interest) were set to£883 per annum based on a 8% p.a. effective interest rate on the borrowing, calculate the following:(i)The initial amount of loan taken out on this contract.(ii)The amount of loan outstanding immediately after the instalment now due is paid.It is agreed that, immediately after the instalment now due, the rate of interest chargedon the outstanding loan is reduced to 5.5% p.a. effective. Consequently, the same annualinstalments will be payable for a revised remaining term and also with an amended finalpayment. Thus, find the following:(a) The revised remaining term of the loan outstanding in whole years.(b) The amount of the amended final payment.(c) The interest component of the amended final payment.

A loan is borrowed money that must be repaid with interest over a specified period, commonly…

Exactly 5 years ago, a loan was taken out that was to be repaid by level annual instalments made in arrears over a 15-year contract. Given that the instalments (of capital and interest) were set to £883 per annum based on a 8% p.a. effective interest rate on the borrowing, calculate the following: (i) The initial amount of loan taken out on this contract. (ii) The amount of loan outstanding immediately after the instalment now due is paid. (iii) It is agreed that, immediately after the instalment now due, the rate of interest charged on the outstanding loan is reduced to 5.5% p.a. effective. Consequently, the same annual instalments will be payable for a revised remaining term and also with an amended final

Exactly 5 years ago, a loan was taken out that was to be repaid by level annual instalments made in arrears over a 15-year contract. Given that the instalments (of capital and interest) were set to £883 per annum based on a 8% p.a. effective interest rate on the borrowing, calculate the following: (i) The initial amount of loan taken out on this contract. (ii) The amount of loan outstanding immediately after the instalment now due is paid. (iii) It is agreed that, immediately after the instalment now due, the rate of interest charged on the outstanding loan is reduced to 5.5% p.a. effective. Consequently, the same annual instalments will be payable for a revised remaining term and also with an amended final

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

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The following loan is fully amortizing. The loan is for $12,000 at 5% interest to be repaid over three (3) years. Amortize this loan on a monthly basis. Calculate the interest portion of the fourth (4th) payment considering that an additional payment of $2,000 was made with the second payment.
Consider a loan of $7700 at 6.8% compounded semiannually, with 18 semiannual payments. Find the following. (a) the payment necessary to amortize the loan (b) the total payments and the total amount of interest paid based on the calculated semiannual payments (c) the total payments and total amount of interest paid based upon an amortization table. (a) The semiannual payment needed to amortize this loan is $ (Round to the nearest cent as needed.) (b) The total amount of the payments is $ (Round to the nearest cent as needed.) The total amount of interest paid is $. (Round to the nearest cent as needed.) (c) The total payment for this loan from the amortization table is $ (Round to the nearest cent as needed.) The total interest from the amortization table is $ (Round to the nearest cent as needed.)
The payment necessary to amortize a 4.9% loan of $86,000 compounded annually, with 4 annual payments is $24,196.70. The total of the payments is $96,786.80 with a total interest payment of $10,786.80. The borrower made larger payments of $25,000.00. Calculate (a) the time needed to pay off the loan, (b) the total amount of the payments, and (c) the amount of interest saved. a. The time needed to pay off the loan with payments of $25,000.00 is _____ years. (Round up to the nearest year.) b. The total amount of the payments is $______ (Round to the nearest cent as needed.) c. The amount of interest saved is $______. (Round to the nearest cent as needed.)
A loan of $ 10,000 is amortized by equal annual payments for 30 years at an effective annual interest rate of 10 % Determine the year in which the interest portion of the payment is most nearly equal to one-half of the payment. The year that the interest portion of payment is most nearly equal to one-half of the payment= ?
A loan is repayable by a decreasing annuity payable annually in arrears for 20 years. The repayment at the end of the first year is $6 000 and subsequent repayments reduce by $200 each year. The repayments were calculated using a rate of interest of 9% per annum effective.Calculate the original amount of the loan.
ou were paying your fully amortising loan at 8.2% per annum for 12 years. The current monthly payment is $1,492 per month. What is the remaining loan balance at the end of year 2? Please rounded your answer to two decimal points (e.g. 8000.158 is rounded to 8000.16)
The payment necessary to amortize a 4.5% loan of $81,000 compounded annually, with 5 annual payments is $18,451.12. The total of the payments is $92,255.60 with a total interest payment of $11,255.60. The borrower made larger payments of $19,000.00. Calculate (a) the time needed to pay off the loan, (b) the total amount of the payments, and (c) the amount of interest saved. Thank you~
This questi Consider a loan of $7700 at 6.8% compounded semiannually, with 18 semiannual payments. Find the following. (a) the payment necessary to amortize the loan (b) the total payments and the total amount of interest paid based on the calculated semiannual payments (c) the total payments and total amount of interest paid based upon an amortization table. (a) The semiannual payment needed to amortize this loan is $ 545.94. (Round to the nearest cent as needed.) (b) The total amount of the payments is $ 9827.07 (Round to the nearest cent as needed.) The total amount of interest paid is $ 2127.07 (Round to the nearest cent as needed.) (c) The total payment for this loan from the amortization table is $ (Round to the nearest cent as needed.) The total interest from the amortization table is $ (Round to the nearest cent as needed.)
A loan of £8,200 is to be repaid over a 11-year contract by three initial payments of £2,000, £2,000 and £4,000 at the end of years 2, 4 and 9, respectively. Hence, find a final amount £X at the end of year 11 that needs to be paid to fully clear the debt given that the lender charges an annual nominal rate of interest of 9.0% convertible monthly. ( correct answer = 8972.45, no tables, please, ONLY formulas)
Prepare an amortization schedule for a five year loan of $58,500. The interest rate is 6% per year and the loan cost for equal annual payments. How much interest is paid in the third year? how much total interest is paid over the life of the loan? Loan amount $ Interest rate Loan term Output area: 58,500 6% 5 Loan payment $13,887.69 Year Beginning balance 1 $ 58,500.00 Total payment Interest paid Principal paid Ending balance $ 13,887.69 $ 3,510.00 $ 10,377.69 $ 48,122.31 2 3 4 5 Total interest paid over life of loan

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