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 $632,000 15.5% Life 49 years January 1, 2021 Date of Loan 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.
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 $632,000 15.5% Life 49 years January 1, 2021 Date of Loan 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.
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: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
$632,000
15.5%
Life
49 years
Date of Loan
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.
Transcribed Image Text:Required:
1. What is the annual payment (round to the nearest $)?
$
2. What are the total interest payments (round to the nearest $)?
$
3. After 29 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)?
%
4. After 29 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 1%
(for a well designed spreadsheet this should take 30 seconds)
Required:
5. What is the annual payment (round to the nearest $)?
6. What are the total interest payments (round to the nearest $)?
$
7. After 29 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)?
%
8. After 29 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)?
%
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