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- 1. Let's assume that a loan of $100,000 with an annual interest rate of 6% over 30 years pays monthly payments of $500. a. Calculate the accumulation rate b. Calculate the payment rate . c. Answer : How will the balance of the principal be at the end of the loan in relation to the original amount of the loan? Less, equal or greater? Provide calculations.Suppose you want to borrow $90,000 and you find a bank offering a 20-year loan with an APR of 5%. a. Find your regular payments if you pay n = 1, 12, 26, 52 times a year. b. Compute the total payout for each of the loans in part (a). c. Compare the total payouts computed in part (b). a. The payment for n = 1 would be $ The payment for n = 12 would be $ The payment for n = 26 would be $ The payment for n= 52 would be $ (Do not round until the final answer. Then round to the nearest cent as needed.)4. You borrow $720,000 at 4.00% per year compounded monthly and you plan to pay off this loan in equal annual payments starting one year after the loan is made over a period of fifteen (15) years. What are the annual end-of-year payments? Determine the amount of interest and principal that are paid each year. What is the total interest paid for the loan? a. b. Restructure the loan in the previous question to make payments monthly. Determine the savings in interest overall. C. Restructure your payment schedule once more to make payment every two weeks. Determine the savings in interest (if any) in this case (compare to both previous repayment options). 1 OF 1
- Assume you borrow $10,000 today and promise to repay the loan in two payments, one in year 2 and the other in year 4, with the one in year 4 being only half as large as the one in year 2. At an interest rate of 10% per year, the size of the payment in year 4 will be closest to:a. $4280b. $3975c. $3850d. $233514. In a discount interest loan, you pay the interest payment up front. For example, if a 1-year loan is stated as $10,000 and the interest rate is 10%, the borrower "pays" .10 × $10,000 = $1,000 immediately, thereby receiving net funds of $9,000 and repaying $10,000 in a year. a. What is the effective interest rate on this loan? (Round your answer to 2 decimal places.) b. If you call the discount d (for example, d = 10% using our numbers), express the effective annual rate on the loan as a function of d. c. Is the effective annual rate always greater than the stated rate d?2B. a. Suppose we have a four year fixed-payment loan with $900 payments made at the end of each year. Given a market interest rate of 7 percent, how much was initially borrowed?
- Q5. Suppose you borrow $10,000. You are going to repay the loan by making equal annual payments for five years. The interest rate on the loan is 15 percent per year. Prepare an amortization schedule for the loan. How much interest will you pay over the life of the loan? Beginning Total Principal Ending Year Interest balance payment раyment раyment balance 1 $10,000 2 3 2,983.16 4 5 0.001. Consider a loan at 4.125% APR on 6 years for a $23,000 car a. Estimate the monthly payment (using the average balance method). b. How much would you pay in total for interest?1.What are the annual payments for a 4-year $4,000 loan if the interest rate is 9% per year? Make up a loan amortization schedule
- 17. a. If you borrow $1,000 and agree to repay the loan in five equal annual payments at an interest rate of 12%, what will your payment be? (Round your answer to the nearest cent.) b. If you make the first payment on the loan immediately instead of at the end of the first year, what is your payment? (Round your answer to the nearest cent.)Suppose you borrow $8500 for a term of five years at a simple interest and 8.25% APR. how much is the total (principal plus interest) you must pay back on the loan?81. Suppose you take out a $10,000 loan at a 6% nominal annual rate. The terms of the loan require you to make 12 equal end-of-month payments each year for 4 years, and then an additional final (balloon) payment of $4,000 at the end of the last month. What will your equal monthly payments be? a. $137.96 b. $145.22 C. $152.86 d. $160.91