Math 1324 Project Mohsen Manouchehri plans to purchase a $300,000 home with a down payment of 20% and financing the rest. He has the choice of two loans: a 20-year loan with an interest rate of 5.76% or a 30-year loan with an interest rate of 6.6%. A. Set up the loan formula with the proper values for the variables for each of the loans: P = -kt PMT (1-(1+)) B. Calculate each loan's monthly payment. 20-year loan payment = 30-year loan payment = C. Examine the remaining balance formulas below for each loan. What do the numbers that have replaced the variables in the formulas represent? Define them explicitly for each loan formula. What is the remaining balance of each loan? How many years before the end of the loan terms is this valid? For the 20 year loan: P = 1686 37- 1686.37(1-(1+.0576)-(144), 12
Math 1324 Project Mohsen Manouchehri plans to purchase a $300,000 home with a down payment of 20% and financing the rest. He has the choice of two loans: a 20-year loan with an interest rate of 5.76% or a 30-year loan with an interest rate of 6.6%. A. Set up the loan formula with the proper values for the variables for each of the loans: P = -kt PMT (1-(1+)) B. Calculate each loan's monthly payment. 20-year loan payment = 30-year loan payment = C. Examine the remaining balance formulas below for each loan. What do the numbers that have replaced the variables in the formulas represent? Define them explicitly for each loan formula. What is the remaining balance of each loan? How many years before the end of the loan terms is this valid? For the 20 year loan: P = 1686 37- 1686.37(1-(1+.0576)-(144), 12
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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Transcribed Image Text:Math 1324 Project
Mohsen Manouchehri plans to purchase a $300,000 home with a down payment of 20% and
financing the rest. He has the choice of two loans: a 20-year loan with an interest rate of 5.76% or a
30-year loan with an interest rate of 6.6%.
A. Set up the loan formula with the proper values for the variables for each of the loans:
P =
-kt
PMT (1-(1+))
B. Calculate each loan's monthly payment.
20-year loan payment =
30-year loan payment =
C. Examine the remaining balance formulas below for each loan. What do the numbers that have
replaced the variables in the formulas represent? Define them explicitly for each loan formula.
What is the remaining balance of each loan? How many years before the end of the loan terms
is this valid?
For the 20 year loan: P =
1686 37-
1686.37(1-(1+.0576)-(144),
12
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