Twelve years ago, Pat and Mike took out a $115,000 loan for 30 years at 9.3% interest. Their monthly payments are $950.25. Mike just received an inheritance and they want to pay off the loan. How much do they still owe?

Twelve years ago, Pat and Mike took out a $115,000 loan for 30 years at 9.3% interest. Their monthly payments are $950.25. Mike just received an inheritance and they want to pay off the loan. How much do they still owe?

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

See similar textbooks

Related questions

Q: our grandmother left you an inheritance that pays $440 at the end of each year for a total of 12…

A: Annual Payment = p = $440Number of payment = n = 12Time until First Payment = t = 5Interest Rate = r…

Q: Cliff deposited $9,000 in a brokerage account, and 10 years later he closes out the account, which…

A: Present Value = pv = $9000Time = t = 10Future Value = fv = $20,500

Q: Cam deposited $50,000 into an IRA 25 years ago, what is the value of his account today if he earned…

A: The problem is asking us to find the future value of an investment. Cam deposited $50,000 into an…

Q: Your sister just deposited $6,500 into an investment account. She believes that she will earn an…

A: Present Value (PV) calculates the current worth of a future sum of money or a series of future cash…

Q: Daniel Jackson is 30 years and wants to retire when he is 65. So far he has saved (1) $6,730 in an…

A: (1) Balance in IRA account=$6,730 Interest rate in IRA account=0.083 (2) Balance in money market…

Q: Your grandmother deposited $10,000 in an investment account on the day you were born to help pay…

A: Solution:- An amount deposited today somewhere earns interest. The amount invested in beginning is…

Q: how much will John have in his retirement account at age 60?

A: Present age is 25 Rate of return = 8% Retirement age = 60

Q: Twenty years ahead of her retirement, Kelly opened a savings account that earns 5% interest rate…

A: The future value of the annuity is the future worth of a cash flow series at a certain rate of…

Q: Nate agreed to pay $550,000 for a house. He made a $125,000 down payment and financed the balance…

A: We need to use loan amortization formula below to calculate monthly payment PMT =P*i1-1(1+i)n where…

Q: Davie bought his home several years ago with a 30-year fixed rate mortgage at an interest rate of…

A: A mortgage is a covered loan where the borrower is given a loan in exchange for keeping the property…

Q: Julian used $90,000 of his savings to purchase a single premium annuity, which pays him $600 per…

A: A single premium annuity is a type of annuity that is purchased with a lump-sum payment. The…

Q: Alex and Steve bought their current house 10 years ago for $355,000 and made a down payment of…

A: EAR = ((1+ r/n)^n) - 1 APR = (((1+EAR)^(1/n)) - 1) x (n) Monthly Payment = Loan/ Monthly…

Q: Exactly six years ago, Jay started investing $10,500 per year in an account that earned 5.00% p.a.…

A: To calculate how much Jay will have in his account exactly seven years from today, we can break down…

Q: Joshua is saving up to buy a house. He invested $10000 at 3.5% per year, compounded quarterly. He…

A: Future Value: The future value is the amount that will be received at the end of a certain period.…

Q: sabel Lopez, from Lewiston, Idaho, is age 19, and she recently received an inheritance of $50,000…

A: Here we will use formula of future value of money to calculate amount after 10 years : FV = PV × 1…

Q: Leon and Heidi decided to invest $3,250 annually for only the first nine years of their marriage.…

A: The future value is considered as the sum of its present value P, after growing at compounded…

Q: Isabel Lopez from Lewiston, Idaho, who is 19 years old, recently received an inheritance of $55,000…

A: The Certificate of Deposit is a savings instrument that provides a fixed rate of return to the…

Q: Bobbi opens an IRA account in which she deposits $3,000 per year until she retires in 50 years. If…

A: The accumulated amount can be calculated with the help of future value of annuity function

Q: Juan received an inheritance from his grandfather. Worried of spending the money unproperly, he…

A: Total amount = $3,000,000 Time = 2 years No of weeks = 52 *2 = 104 Rate = 2%…

Q: Trish invests $6,000 in her IRA in a bond trust that pays 11% interest compounded semiannually. Sean…

A: The future value function or concept can be used to determine the future value of a present sum or…

Q: Jason received an amount of 1000.00 from his grandpa as a birthday gift. He decides to invest the…

A: Principal Amount, P = 1,000 Interest rate, r = 10% = 0.10 Time, t = 5 years Future Value, FV = P…

Q: Alec bought a home for $179,000. He had a $50,000 down payment and got a 30-year fixed rate mortgage…

A: Mortgage is a value which is borrowed from the external sources like banks for the particular period…

Q: Your sister just deposited $9,000 into an investment account. She believes that she will earn an…

A: The concept of time value of money will be used here. Since future value has to be computed we will…

Q: jesse recieved $5,000 from his grandmother when he turned 18. if he invests it at 5.5%(12), how much…

A: The question gives the following information:

Q: A rich uncle gave two brothers $5,000 each. Caleb will double his money in 9 years. It will take…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

Q: Alec bought a home for $202,000. He had a $48,000 down payment and got a 30-year fixed r mortgage at…

A: The PMT function is a type of financial function which helps to determine the total monthly payment…

Q: Julie deposited some money in a savings account this morning. Her money will earn 5 percent…

A: Computation:

Q: Craig and sally just got married .they want to have $750.000 in a retirement account in 40 years .…

A: We need to use future value of annuity formula for calculation of periodic deposit to achive the…

Q: After retiring, Valeria wants to be able to withdraw $36,500.00 every year from her account for 27…

A: Amount to withdraw every year "PMT" is $36,500 Time period "N" is 27 years Interest rate "I/Y" is…

Q: Judy recently purchased her first home for $220,000. She made a down payment of $20,000, and…

A: First we need to calculate PV annuity factor for loan to calculate monthly payment. Since payment is…

Q: Your sister just deposited $11,500 into an investment account. She believes that she will earn an…

A: Value of sister's investment account in 7 years is calculated using following equation Future value…

Q: Ann's grandmother put some money in an account for her on the day she was born. She is now 18 years…

A: Given information: Present value amount is Ksh 400,000 Interest rate is 8% per annum, Present age is…

Q: Larry borrowed $1,000 through a loan shark, two years later he ended up paying $1,500 to settle his…

A: In contrast to a fee that the borrower may pay the lender or another party, interest is a payment…

Q: Jillian invested $2,000 six years ago at 4.5 percent interest. She spends all of her interest…

A: Data given: Amount invested=$2000 Interest rate=4.5% Jillian spends all of her interest earnings…

Q: our sister just deposited $5,000 Into an investment account. She belleves that she will earn an…

A: The concept of time value of money will be used here. Since future value has to be computed we will…

Q: Some time ago, Marie took out a loan from the bank to purchase an apartment. The terms of the loan…

A: in this we have to find effective interest rate and than find out present value FACTOR.

Q: Ann’s grandmother put some money in an account for her on the day she was born. She is now 18 years…

A: The amount of money in her account when she turns 70 is calculated by using the future value formula…

Q: Frank buys a house at age 48 for $600,000 by making a $170,000 down payment and securing a 30-year…

A: Annuity refers to series of equalized payments that are paid or received at start or ending of…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Introduction,

VIEW

Calculation of the loan balance after twelve years is as follow

VIEW

Answer

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Homer is 65 years old and ready to retire. He has $200,000 in a 401k at retirement account. According to most experts, how much can he withdraw each year to help mak sure that the money lasts throughout his remaining years? O 20% O 3% O 10% 50%
Frankie purchased a house for $185,000 . He put 20% of the purchase down as a down payment. He financed the house for 4.25% for 15 years. The annual taxes are $1250 and the annual insurance is $1056. What is his monthly principal, interest, tax and insurance (PITI) mortgage payment.
When Christian bought his home, he borrowed $315,700 at 4.2% interest, compounded monthly for 25 years. If he makes all 300 payments, repaying his loan on schedule, how much interest will he pay? (Assume all payments are of equal amount)
Isabel Lopez, from Lewiston, Idaho, is age 19, and she recently received an inheritance of $50,000 from her grandmother’s estate. She plans to use the money for the down payment on a home in ten years when she finishes her education. Right now the funds are in a savings account paying 1.0 percent APY. How much would Isabel have in ten years if instead she purchased a ten-year CD paying 3.0 percent?
1 Ann and Sue sell their recreation property. They make $245,000 on the sale and deposit it immediately into a retirement fund. The fund earns 2.45%, compounded monthly, for the entire time. Exactly ten years after the sale, Ann retires. They now want to start supplementing their income with payments from the retirement fund. They want the payments to start one month after Ann retires. They want these payments to last for 5 years. How much can they withdraw per month from the retirement fund? (ANNUITY)
Phoebe saved a total of $2 550 000 for her retirement. She invested the money in a mutual fund that pays 9% interest compounded monthly. How much should she withdraw each month so that she could have enough money to last for 15 years?
A mother earned $18750.00 from royalties on her cookbook. She set aside 20% of this for a down payment on a new home. The balance will be used for her son's future education. She invests a portion of the money in a bank certificate of deposit (CD account) that earns 4% and the remainder in a savings bond that earns 7%. If the total interest earned after one year is $900.00, how much money was invested at each rate? How much money was invested in the CD account? (Round to the nearest cent.) GILB
Your grandmother bought an annuity from Great-West Life Insurance Company for $361,220 when she retired. In exchange for the $361,220, Great-West will pay her $30,000 per year until she dies The interest rate is 6%. How long must she live after the day she retired to come out ahead (that is, to get more in value than what she paid in? -CHED She must live at least years. (Round up to the nearest whole year.)
Leon and Heidi decided to invest $2,750 annually for only the first Nine years of their marriage. The first payment was made at age 25. If the annual interest rate is 9%, how much accumulated interest and principal will they have at age 70?
Ben invested $7,500 twenty years ago with an insurance company that has paid him 6 percent simple interest on his funds. Charles invested $7,500 twenty years ago in a fund that has paid him 6 percent interest, compounded annually. How much more interest has Charles earned than Ben over the past 20 years?
Seven years ago, lan purchased a $265,000 home with a 30-year mortgage at 3.5%. Having recently lost his job, he can no longer afford to make his mortgage paymentsIf he currently owes $225,368.29 and his lender offered to extend the loan by 7 years at %, what will be his new mortgage payment?
Jim and Jane just married and want to purchase a house. They have $80,000 for a down payment and want to purchase a $380,000 house. If they borrow the balance for 15 years at 5.5%, how much are their monthly payments?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS