Sarah secured a bank loan of $200,000 for the purchase of a house. The mortgage is to be amortized through monthly payments for a term of 15 yr, with an interest rate of 6%/year compounded monthly on the unpaid balance. She plans to sell her house in 5 yr. How much will Sarah still owe on her house?

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You find that a small business loan in the amount of 50,000 isthe amount you need to purchase the restaurant location. Afterresearching banks to find the best interest rate, you find thatbanks for small businesses offer the best interest rate of 9%interest that compounds monthly for 7 years.
What is the monthly payment for this loan?

1. You find that a small business loan in the amount of 50,000is the amount you need to purchase the restaurant location. Afterresearching banks to find the best interest rate, you find thatbanks for small businesses offer the best interest rate of 9%interest that compounds monthly for 7 years.

a. What is the monthly payment for this loan?
b. Show the formula that you used and the values used for eachvariable to calculate the monthly payment.
c. What is the unpaid balance of the loan at the end of the 1styear?
d. Show the formula that you used and the values used for eachvariable to calculate the unpaid balance at the end of the 1styear.
e. What is the unpaid balance at the end of the 6th year? Show theformula that you used and the values used for each variable tocalculate the unpaid balance at the end of the 6thyear.

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