### Example of Simple Interest Amortized Loan CalculationSlopes R Us needs to borrow $100,000 to increase its inventory of ski equipment for the upcoming season. The owner is confident that she will sell most, if not all, of the new inventory during the winter, so she wishes to borrow the money for only five months.#### Loan Details1. **Principal Amount**: $100,0002. **Interest Rate**: $ 8 \frac{7}{8} \% $ per annum (8.875%)3. **Loan Duration**: 5 monthsHer bank has offered her a simple interest amortized loan.### Tasks**(a) Find the size of the monthly bank payment.**To find the monthly payment amount, use the amortization formula for a simple interest loan:\[ PMT = \frac{P \times r \times (1 + r)^n}{(1 + r)^n - 1} \]where:- $ PMT $ = monthly payment- $ P $ = principal loan amount- $ r $ = monthly interest rate- $ n $ = number of paymentsPlugging in the numbers:- $ P = 100,000 $- Annual interest rate = 8.875%, so the monthly interest rate $ r = \frac{8.875\%}{12} = 0.73958\% = 0.0073958 $- $ n = 5 $**(b) Prepare an amortization schedule for all five months of the loan.**An amortization schedule is a table detailing each periodic payment on an amortizing loan (typically a mortgage), as generated by an amortization calculator. ### Amortization Schedule Template| Payment Number | Principal Portion | Interest Portion | Total Payment | Amount Due after Payment ||----------------|-------------------|------------------|---------------|--------------------------|| 0 | - | - | - | $100,000 || 1 | $ | $ | $ | $ || 2 | $ | $ | $ | $ || 3 | $ | $ | $ | $ || 4 | $

Amortization is a process of gradually writing off the initial cost of an asset.

Slopes R Us needs to borrow $100,000 to increase its inventory of ski equipment for the upcoming season. The owner is confident that she will sell most, if not all, of the new inventory during the winter, so she wishes to borrow the money for only five months. Her bank has offered her a simple interest amortized loan at 8-% interest. (Round your answers to the nearest cent.) (a) Find the size of the monthly bank payment. 24 (b) Prepare an amortization schedule for all five months of the loan. Amount Payment Principal Interest Total Due after Number Portion Portion Payment Payment

Slopes R Us needs to borrow $100,000 to increase its inventory of ski equipment for the upcoming season. The owner is confident that she will sell most, if not all, of the new inventory during the winter, so she wishes to borrow the money for only five months. Her bank has offered her a simple interest amortized loan at 8-% interest. (Round your answers to the nearest cent.) (a) Find the size of the monthly bank payment. 24 (b) Prepare an amortization schedule for all five months of the loan. Amount Payment Principal Interest Total Due after Number Portion Portion Payment Payment

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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William wants to borrow $42,000.00 today to purchase a car, which bank's lending option will allow him to achieve this? O a. Bank Macerato: A repayment of $425.00 at the beginning of each two weeks (biweekly) for 4 years at an interest rate of 2.35% compounded biweekly. O b. Bank Catanzaro: A repayment of $700.00 at the beginning of each month for 5 years at an interest rate of 2.50% compounded monthly. O c. Bank Prato: A repayment of $2,700.00 at the end of each quarter for 4 years at an interest rate of 2.45% compounded quarterly. O d. Bank Vasto: A repayment of $270.00 at the end of each week for 3 years at an interest rate of 2.20% compounded weekly.
You bought a house for $500,000 with a 30 year bank loan that has quarterly payments at an interest rate of 7% (APR). Immediately after year 10 (20 years left on the loan). You will resell the house for $ 600,000 and completely pay off the rest of the loan. How much do you have to pay the bank to completely pay off the loan? $428, 652.86 $426,866.75 $361, 273.83 $514,383.43
Suppose a recent college graduate's first job allows her to deposit $250 at the end of each month in a savings plan that earns 9%, compounded monthly. This savings plan continues for 11 years before new obligations make it impossible to continue. If the accrued amount remains in the plan for the next 15 years without deposits or withdrawals, how much money will be in the account 26 years after the plan began? (Round your answer to the nearest cent.) $
You are considering purchasing a lot adjacentto your laundry business to provide adequate parking space for your customers. You need to borrow$75,000 to secure the lot. You have made a deal with alocal bank to pay the loan back over a five-year periodwith the following payment terms: 14%, 20%, 26%,32%, and 38% of the initial loan at the end of first,second, third, fourth, and fifth years, respectively.(a) What rate of interest is the bank earning fromthis loan?(b) What would be the total interest paid over thefive-year period?
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If Bob borrowed $30,000, the bank would charge an interest rate of 4% p.a. compounded semi-annually. The loan and interest will have to be repaid to the bank over the 5 years with equal payments needing to be made at the beginning of each period. If Bob borrows the money from this bank, what will be the semi-annual payments that he will make? What is the total cash repayment for the loan over the period? Please dont provide answer in image format thank you
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You have just completed your four-year degree at Southwest Minnesota State University (SMSU)! Your student loans that you have accumulated while studying at SMSU total $25,000. Since you have graduated, you must now begin repaying these student loans. The loan’s annual interest rate is six percent (6%) and it requires four equal end-of-year payments. a) Set up an amortization schedule that shows the annual payments, interest payments, principal repayments, and beginning and ending loan balances. B) What is the total amount that you will repay over this four-year period (principal + interest)? c) What portion or percentage are the total “Interest Payments” of the initial loan value of $25,000?

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