(a) Explanation Given information: An auto loan of $15,000 at 8% versus 8.5% both compounded monthly for 4 years. Formula Used: The Amortization formula: R = A n [ i 1 − ( 1 + i ) − n ] Calculation: Consider the provided information as, An auto loan of $15,000 at 8% versus 8.5% both compounded monthly for 4 years. As deposits is made monthly, the total number of periods for first 4 years will be ( 12 ) ( 4 ) = 48 . Also, the rate will become, i = 0.08 12 = 0.0066 The value of A n is 15000 . Now the monthly payment will be: R = 15000 [ 0.0066 1 − ( 1 + 0.0066 ) − 48 ] = 15000 ( 0.0243 ) = 365.63 The interest will be: 48 ( 365.63 ) − 15000 = 17550.24 − 15000 = 2550 (b) To determine To calculate: The amount needs to pay monthly and total interest that has paid during the life of loan and figure out difference made on a loan due to 0.5%, if a mortgage took loan of $80,000 at 6.75% and 7.25% which compounded monthly for 30 years. (c) To determine To calculate: The amount needs to pay monthly and total interest that has paid during the life of loan and figure out difference made on a loan due to 0.5%, if a mortgage took loan of $80,000 at 8% and 8.5% which compounded monthly for 30 years.

Mathematical Applications for the Management, Life, and Social Sciences

11th Edition

ISBN: 9781305108042

Author: Ronald J. Harshbarger, James J. Reynolds

Publisher: Cengage Learning

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Chapter 6.5, Problem 35E

(a)

To determine

To calculate: The amount needs to pay monthly and total interest that has paid during the life of loan and figure out difference made on a loan due to 0.5% if a loan of $15000 at 8.0% versus 8.5% both compounded monthly for 4 years.

(b)

To determine

To calculate: The amount needs to pay monthly and total interest that has paid during the life of loan and figure out difference made on a loan due to 0.5%, if a mortgage took loan of $80,000 at 6.75% and 7.25% which compounded monthly for 30 years.

(c)

To determine

To calculate: The amount needs to pay monthly and total interest that has paid during the life of loan and figure out difference made on a loan due to 0.5%, if a mortgage took loan of $80,000 at 8% and 8.5% which compounded monthly for 30 years.

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Chapter 6.5, Problem 34E

Chapter 6.5, Problem 36E

Chapter 6 Solutions

Mathematical Applications for the Management, Life, and Social Sciences

Ch. 6.1 - CHECKPOINT 1. What is the simple interest...Ch. 6.1 - CHECKPOINT 2. If $8000 is invested at 6% simple...Ch. 6.1 - CHECKPOINT 3. If a $2500 investment grows to $2875...Ch. 6.1 - Prob. 4CP Ch. 6.1 - CHECKPOINT 5. Given the arithmetic sequence...Ch. 6.1 - Prob. 1E Ch. 6.1 - SIMPLE INTEREST In Problems 1-4, find the...Ch. 6.1 - SIMPLE INTEREST In Problems 1-4, find the...Ch. 6.1 - Prob. 4E Ch. 6.1 - 3. $10,000 is invested for 6 years at an annual...

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The amount needs to pay monthly and total interest that has paid during the life of loan and figure out difference made on a loan due to 0.5% if a loan of $15000 at 8.0% versus 8.5% both compounded monthly for 4 years.

Solution Summary: The author calculates the amount needed to pay monthly and total interest that has paid during the life of loan and figure out difference made on a loan due to 0.5%.

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To calculate: The amount needs to pay monthly and total interest that has paid during the life of loan and figure out difference made on a loan due to 0.5% if a loan of $15000 at 8.0% versus 8.5% both compounded monthly for 4 years.

To calculate: The amount needs to pay monthly and total interest that has paid during the life of loan and figure out difference made on a loan due to 0.5%, if a mortgage took loan of $80,000 at 6.75% and 7.25% which compounded monthly for 30 years.

To calculate: The amount needs to pay monthly and total interest that has paid during the life of loan and figure out difference made on a loan due to 0.5%, if a mortgage took loan of $80,000 at 8% and 8.5% which compounded monthly for 30 years.

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Chapter 6 Solutions