In order to accumulate enough money for a down payment on a house, a couple deposits $623 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 5 years? Type the amount in the account: $ (Round to the nearest dollar.)

In order to accumulate enough money for a down payment on a house, a couple deposits $623 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 5 years? Type the amount in the account: $ (Round to the nearest dollar.)

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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Jim and Joan Miller are borrowing $120,000 at 6.5% per annum compounded monthly for 30 years to purchase a home. Their monthly payment is determined to be $758.48. You need to present Jim and Joan with a report detailing the following: A recursive formula for their balance after each monthly payment has been made. A determination of Jim and Joan's balance after the first payment. Use a spreadsheet or graphing utility to create a table showing their balance after each monthly payment. Determine when the balance will be below $75,000. Determine when the balance will be paid off. Determine the interest expense when the loan is paid.
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A couple who borrow $100,000 for 30 years at 8.4%, compounded monthly, must make monthly payments of $761.84. (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?
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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 4 years, they are able to make a one-time payment of $2,000 along with their 48th payment. (a) Find the unpaid balance immediately after they pay the extra $2,000 and their 48th 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. (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.) (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.)

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