Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Jack accumulated $40,000 in student loans. He agrees to pay the
debt over 10 years at a rate of 4.5%, compounded monthly. His
monthly payments are of $414.55, which he pays at the end of each
month.
After two years of making these payments, Jack gets a higher-paying
job and wants to increase the size of his monthly payments to pay off
the loan more quickly.
If his interest rate is still 4.5%, compounded monthly, and he pays off
the loan after two more years, how much are the new monthly
payments?
(HINT: Start by finding Jack's unpaid balance at the end of the first
two years.)
ANSWER: $
Do not include units in the answer box. Just a number. Round your
answer to the nearest cent.
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Transcribed Image Text:Jack accumulated $40,000 in student loans. He agrees to pay the debt over 10 years at a rate of 4.5%, compounded monthly. His monthly payments are of $414.55, which he pays at the end of each month. After two years of making these payments, Jack gets a higher-paying job and wants to increase the size of his monthly payments to pay off the loan more quickly. If his interest rate is still 4.5%, compounded monthly, and he pays off the loan after two more years, how much are the new monthly payments? (HINT: Start by finding Jack's unpaid balance at the end of the first two years.) ANSWER: $ Do not include units in the answer box. Just a number. Round your answer to the nearest cent.
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