Asmal Percentage Rate(APR)The cash price for furmiture for all rooms of a three-bed-room house is $7234. Thefumiture can be financed by paying $500 down and $274 per month for 30 months.However, instead of making the eighteenth payment the borrower decides to pay theNumbert MostbhPayments As 135% 14 14ss 15A% IS% 16(Finance charge per St0f amt aneed)SE12 1127remaining balance and terminate the loan for the furniture.13.97$457$4.72127.181741810A1ILOI1.45117122912721142414.1014661523150163716941731174421 30301981205421 2421.9922172104212248025 8 657A. Use the actuarial method to determine how much interest will be saved by repaying the loan early.Saved Interest $

In actuarial method, the allocation of payment is made on a loan between the due balance of loan and…

The cash price for furniture for all rooms of a three-bed-room house is $7234. The fumiture can be financed by paying $500 down and $274 per month for 30 months. However, instead of making the eighteenth payment the borrower decides to pay the remaining balance and terminate the loan for the furniture. Asal Percentage Rate (APRI Number Moshh Payment As 1S% s 4ss 15 S% 6 (nance churge per SI0 af amt meed) 33.97 S12 $41.27 $4.57 1472 12 718 746 174 18 1.45 12.29 12.72 24 1410 1521 150 1731 30 174 1981 2054 21 24 2199 21 2217 2104 21 240 25 2457 A. Use the actuarial method to determine how much interest will be saved by repaying the loan early. Saved Interest = $

The cash price for furniture for all rooms of a three-bed-room house is $7234. The fumiture can be financed by paying $500 down and $274 per month for 30 months. However, instead of making the eighteenth payment the borrower decides to pay the remaining balance and terminate the loan for the furniture. Asal Percentage Rate (APRI Number Moshh Payment As 1S% s 4ss 15 S% 6 (nance churge per SI0 af amt meed) 33.97 S12 $41.27 $4.57 1472 12 718 746 174 18 1.45 12.29 12.72 24 1410 1521 150 1731 30 174 1981 2054 21 24 2199 21 2217 2104 21 240 25 2457 A. Use the actuarial method to determine how much interest will be saved by repaying the loan early. Saved Interest = $

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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Calculate the monthly payment by table lookup and formula. (Answers will not be exact due to rounding of percents in table lookup.). (Use 13% for table lookup.). (Use the loan amortization table) (Round your answers to the nearest cent.) Purchase price of a used car $5,673 By table By formula Down payment $1,223 Monthly Payment Number of monthly payments 48 Amount financed $4,450 Total of monthly payments $5,729.76 Total finance charge $1,279.76 APR 13%
Enter your dollar answers rounded to the nearest two cents and precede numbers that are less than zero (0) with a minus sign (–).) Buy On Time or Pay Cash Cost of Borrowing 1. Terms of the loan a. Amount of the loan $10,000.00 b. Length of the loan (in years) 5 c. Monthly payment $188.70 2. Total loan payments made ($ per month months) $ 3. Less: Principal amount of the loan $ 4. Total interest paid over life of loan $ 5. Tax considerations: – Is this a home equity loan? no – Do you itemize deductions on your federal tax return? yes 6. What federal tax bracket are you in? 35% 7. Taxes saved due to interest deductions ($ x %) $ 8. Total after-tax interest cost on the loan $ Cost of Paying Cash 9. Annual interest earned on savings (6% x ) $ 10. Annual after-tax interest earnings ($ x %) $ 11. Total after-tax interest earnings…
Round final dollar answers to 2 decimal places. Karly makes loan payments of $1,100 at the end of each month towards the purchase of a recreational vehicle for a term of 4 years at 4.25% compounded quarterly. Referring to the "?"s in the table, and considering inflows and outflows of cash, enter the appropriate values in the blanks below. Mode END PV = PMT= N FV= IY CY Purchase Price = 4.25 4 A P N PV a. Determine the purchase price of the vehicle if Karly made a $7,000 down payment. N = ? PMT N A ? PY 12 FV ? b. Including the down payment, how much will Karly have contributed towards the purchase of the vehicle by the end of the 4 years? Total Contribution = A/ c. Karly is considering paying off the loan early. What is the balance owing on the loan after she makes the 30th payment? Balance Owing - A/ d. How much interest will she have paid out, in total, if she pays the balance owing after the 30th payment? Interest=
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Calculate the monthly payment by table lookup and formula. (Answers will not be exact due to rounding of percents in table lookup.). (Use 13% for table lookup.). (Use the loan amortization table) Note: Round your answers to the nearest cent. Purchase price of a used car Down payment Number of monthly payments Amount financed Total of monthly payments Total finance charge APR $5,693 $1,233 48 $4,460 $5,749.76 $1,289.76 13% Monthly payment By table By formula TABLE 14.2 Loan amortization table (monthly payment per $1,000 to pay principal and interest on installment loan) Terms in months 7.50% 8.00% 8.50% 9.00% 10.00% 10.50% 11.00% 11.50% 12.00% 12.50% 13.00% 13.50% 14.00% 14.50% 15.00% 15.50% 16.00% 6 $ 170.34 $ 170.58 $ 170.83 $ 171.20 $ 171.56 $ 171.81 $ 172.05 $ 172.30 $ 172.55 $ 172.80 $ 173.04 $ 173.29 $ 173.54 $ 173.79 $ 174.03 $ 174.28 $ 174.53 12 86.76 86.99 87.22 87.46 87.92 88.15 88.38 88.62 88.85 89.08 89.32 89.55 89.79 90.02 90.26 90.49 90.73…
When purchasing a $100,000 house, a borrower is comparing two loan alternatives. The first loan is an 80% loan at 4% with monthly payments of $591.75 for 15 years. The second loan is 90% loan at 5% with monthly payments of $526.13 over 25 years. What is the incremental cost of borrowing the extra money assuming the loan will be held for the full term? O 6.50% O 13.21% O 7.20% O 13.70%

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