Sarah secured a bank loan of $170,000 for the purchase of a house. The mortgage is to be amortized through monthly payments for a term of 15 years, with an interest rate of 3%/year compounded monthly on the unpaid balance. She plans to sell her house in 5 years. How much will Sarah still owe on her house? (Round your answer to the nearest cent.)

Question

Question A Section

1: Sarah secured a bank loan of $170,000 for the purchase of a house. The mortgage is to be amortized through monthly payments for a term of 15 years, with an interest rate of 3%/year compounded monthly on the unpaid balance. She plans to sell her house in 5 years. How much will Sarah still owe on her house? (Round your answer to the nearest cent.)

2: Jessica wants to accumulate $10,000 by the end of 6 years in a special bank account, which she had opened for this purpose. To achieve this goal, Jessica plans to deposit a fixed sum of money into the account at the end of the month over the 6-year period. If the bank pays interest at the rate of 6% per year compounded monthly, how much does she have to deposit each month into her account? (Round your answer to the nearest cent.)

3: Find the periodic payment R required to amortize a loan of P dollars over t years with interest charged at the rate of r%/year compounded m times a year. (Round your answer to the nearest cent.)

P = 50,000, r = 2, t = 19, m = 2

4: The Flemings secured a bank loan of $296,000 to help finance the purchase of a house. The bank charges interest at a rate of 4%/year on the unpaid balance, and interest computations are made at the end of each month. The Flemings have agreed to repay the loan in equal monthly installments over 25 years. What should be the size of each repayment if the loan is to be amortized at the end of the term? (Round your answer to the nearest cent.)

Section A BONUS

1: The price of a new car is $28,000. Assume that an individual makes a down payment of 25% toward the purchase of the car and secures financing for the balance at the rate of 9%/year compounded monthly. (Round your answers to the nearest cent.)

(a)What monthly payment will she be required to make if the car is financed over a period of 36 months & 60 months?

36 months= 60 months=

(b) What will the interest charges be if she elects the 36-month plan or the 60 month? 36 months= 60 months=

Question B Section

1: A group of private investors purchased a condominium complex for $5 million. They made an initial down payment of 12% and obtained financing for the balance. If the loan is to be amortized over 13 years at an interest rate of 6.6%/year compounded quarterly, find the required quarterly payment. (Round your answer to the nearest cent.)

2: Find the periodic payment R required to amortize a loan of P dollars over t years with interest charged at the rate of r%/year compounded m times a year. (Round your answer to the nearest cent.)

P = 90,000, r = 5.5, t = 13, m = 4

3: Andrea, a self-employed individual, wishes to accumulate a retirement fund of $500,000. How much should she deposit each month into her retirement account, which pays interest at a rate of 2.5%/year compounded monthly, to reach her goal upon retirement 30 years from now? (Round your answer to the nearest cent.)

4: Find the periodic payment R required to accumulate a sum of S dollars over t years with interest earned at the rate of r%/year compounded m times a year. (Round your answer to the nearest cent.)

S = 140,000, r = 3.5, t = 30, m = 2

5: Suppose payments were made at the end of each month into an ordinary annuity earning interest at the rate of 5.5%/year compounded monthly. If the future value of the annuity after 10 years is $65,000, what was the size of each payment? (Round your answer to the nearest cent.)

Section B BONUS

1: The Sandersons are planning to refinance their home. The outstanding principal on their original loan is $140,000 and is now to be amortized in 240 equal monthly installments at an interest rate of 5%/year compounded monthly. The new loan they expect to secure is to be amortized over the same period at an interest rate of 4.1%/year compounded monthly. How much less can they expect to pay over the life of the loan in interest payments by refinancing the loan at this time? (Round your answer to the nearest cent.)

2: What monthly payment is required to amortize a loan of $45,000 over 15 years if interest at the rate of 8%/year is charged on the unpaid balance and interest calculations are made at the end of each month? (Round your answer to the nearest cent.)