Purchase Solution

If you take $8,000 car loan that calls 48 monthly payments at an APR of 10 percent

Not what you're looking for?

Ask Custom Question

22. Loan Payment If you take $8,000 car loan that calls 48 monthly payments at an APR of 10 percent. What is your monthly payment? What is the effective annual interest rate on the loan?

37. Amortizing Loan. You take out a 30-year $100,000 mortgage loan with an APR of 6 percent and monthly payments. In 12 years you decide to sell your house and pay off the mortgage.
What is the principal balance on the loan?

38. Amortizing Loan Consider a 4-year amortizing loan. You borrow $1,000 initially an repay it in four equal annual year-end payments.

a. If the interest rate is 8 percent show that the annual payment is $301.92

b. Fill in the following table, which shows how much of each payment is interest versus principal repayment (that is amortization), and the outstanding balance on the loan at each date.

Time Loan Balance Year-end Interest Year-end Payment Amortization of Loan
Due on Balance
0 $1,000 $80 $301.92 $221.92
1 _______ _________ $301.92 _____
2 _______ _________ $301.92 _____
3 _______ _________ $301.92 _____
4 0 0 __ ___

c. Show that the loan balance after 1 year is equal to the year-end payment of $301.92 times the 3-year annuity factor.

Purchase this Solution

Solution Summary

This posting gives a detailed solution to the student's question.

Purchase this Solution


Free BrainMass Quizzes
Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Operations Management

This quiz tests a student's knowledge about Operations Management

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.