Shawn received a 30 year loan of $295,000 to purchase a house. The interest rate on the loan was 4.20% compounded monthly. a. What is the size of the monthly loan payment? $ Round to the nearest cent b. What is the principal balance of the loan at the end of 3 years?

Shawn received a 30 year loan of $295,000 to purchase a house. The interest rate on the loan was 4.20% compounded monthly. a. What is the size of the monthly loan payment? $ Round to the nearest cent b. What is the principal balance of the loan at the end of 3 years?

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 14E

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

c. By how much will the amortization period shorten if Shawn made an extra payment
of $54,000 at the end of the year 3?
years E
months
Express the answer in years and months, rounded to the next month

Shawn received a 30 year loan of $295,000 to purchase a house. The interest rate on
the loan was 4.20% compounded monthly.
a. What is the size of the monthly loan payment?
$
Round to the nearest cent
b. What is the principal balance of the loan at the end of 3 years?
$
Round to the nearest cent

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