You borrow money on a self liquidating installment loan (equal payments at the end of each year, each payment is part principal part interest) Loan amount Interest Rate Life $458,000 12.1% 59 years January 1, 2021 Use the installment method - not straight line Do NOT round any interrmediate numbers. Do NOT turn this into a monthly problem. Do NOT put in minus signs, answer all positive numbers. Date of Loan Required: 1. What is the annual payment (round to the nearest $)?
You borrow money on a self liquidating installment loan (equal payments at the end of each year, each payment is part principal part interest) Loan amount Interest Rate Life $458,000 12.1% 59 years January 1, 2021 Use the installment method - not straight line Do NOT round any interrmediate numbers. Do NOT turn this into a monthly problem. Do NOT put in minus signs, answer all positive numbers. Date of Loan Required: 1. What is the annual payment (round to the nearest $)?
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
Related questions
Question
Transcribed Image Text:You borrow money on a self liquidating installment loan (equal payments at the end of each year, each payment is part principal part
interest)
Loan amount
$458,000
12.1%
59 years
January 1, 2021
Interest Rate
Life
Date of Loan
Use the installment method - not straight line
Do NOT round any interrmediate numbers.
Do NOT turn this into a monthiy problem.
Do NOT put in minus signs, answer all positive numbers.
Required:
1. What is the annual payment (round to the nearest $)?
2. What are the total interest payments (round to the nearest $)?
3. After 35 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)?
4. After 35 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)?
%
Redo the problem if the interest rate is 2%
(for a well designed spreadsheet this should take 30 seconds)
Required:
5. What is the annual payment (round to the nearest $)?
2$
6. What are the total interest payments (round to the nearest $)?
$
7. After 35 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)?
8. After 35 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education