Qw.16. c. By how much will the amortization period shorten if Laura makes an extra paymentof $30,000 at the end of year 4?yearsmonths Laura received a 15 year loan of $240,000 to purchase a house. The interest rate onthe loan was 4.00% compounded semi-annually.a. What is the size of the monthly loan payment?$79,341.37Round to the nearest centb. What is the balance of the loan at the end of year 4?

Data given: Loan=$240000 r=4% (compounded semi-annually) N=15 year nper=15*12=180 Working Note…

Laura received a 15 year loan of $240,000 to purchase a house. The interest rate or the loan was 4.00% compounded semi-annually. a. What is the size of the monthly loan payment? $79,341.37 Round to the nearest cent b. What is the balance of the loan at the end of year 4?

Laura received a 15 year loan of $240,000 to purchase a house. The interest rate or the loan was 4.00% compounded semi-annually. a. What is the size of the monthly loan payment? $79,341.37 Round to the nearest cent b. What is the balance of the loan at the end of year 4?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 19PROB

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

Qw.16.

c. By how much will the amortization period shorten if Laura makes an extra payment
of $30,000 at the end of year 4?
years
months

Laura received a 15 year loan of $240,000 to purchase a house. The interest rate on
the loan was 4.00% compounded semi-annually.
a. What is the size of the monthly loan payment?
$79,341.37
Round to the nearest cent
b. What is the balance of the loan at the end of year 4?

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