To purchase $11,900 worth of restaurant equipment for his business, Greg made a down payment of $1400 and took out abusiness loan for the rest. After 3 years of paying monthly payments of $319.44, he finally paid off the loan.(a)What was the total amount Greg ended up paying for the equipment(including the down payment and monthly payments)?(b) How much interest did Greg pay on the loan?

Total amount paid by Greg is equal to: = Down Payment made by Greg + (Number of payments * Payments)

Answered: To purchase $ 11,900 worth of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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(a) Heather borrowed $5000 from her grandmother as a down payment on her first car. She promised to repay the debt in 2 years at 7% per annum, simple interest. How much should Heather repay her grandmother? (b) How much must Jason deposit in a special account paying interest at the rate of 9.5% to receive $75.21 in interest after 6 months? (c) An investment of $4500 gained $337.50 in intesest in 9 months. What rate of yearly intesest did the investment pay?
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In order to start a small business, Samy borrowed RM40, 000 from a bank. The loan is repaid by monthly installment for five years. The interest charged is 5% on the original balance. (a) Determine the monthly payment. (b) Immediately after paying for three years and six months, he decided to pay off the loan. Using the Rule of 78, calculate the amount he has to pay.
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2. At the beginning of his musical career, John Lemon took out a $3,750,000 5-year-loan to build a recording studio in his home. The loan had an interest rate of 10.35%. a. Suppose John decided to repay the loan in 5 years by making equal annual end-of year payments. Determine John’s annual loan payment and build an amortization table for the loan. b. How much will John pay in interest over the life of the loan if he makes equal annual end of year payments? c. Suppose instead, John decided to pay $750,000 in principal every year, as a fixed amount. Build an amortization table for the loan.
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Upon selling his residence, the lawyer Hinojosa buys a flat and deposits the rest in an account that earns him 8.4% simple annual interest. How much did he get for his house if in 5 years the account earned him $243,600 in interest and how much money did he invest in the flat, assuming 53.6%?

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