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12 Aug 2018

A couple has decided to purchase a $370000 house using a downpayment of $21000. They can amortize the balance at 12% over 30years.
a) What is their monthly payment? Answer = $
b) What is the total interest paid? Answer = $
c) How much of their first payment went toward paying interest?Answer = $
d) How much of their first payment went toward paying the balanceof the loan. Answer = $

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Trinidad Tremblay
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12 Aug 2018

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Eighteen years ago, a couple purchased a house for $110,000.They put 20% down, and financed the remainder for 30 years at 6.36%compounded monthly. (Show work)

a) What was their monthly payment?

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d) What is the balance today?

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6. A debt of $5,300 due in four years and another $11,500 due in twelve years will be settled by making two equal payment, one at the end of six years and the other at the end of 9 years, Find the total payment assuming that money is worth 8% compounded quarterly. Use the twelve years as a focal date.

7. On 5 februrary 2012, Anna borrows $80,000 and agree to repay the loan in 110 days at 9% per annum simple interest, Find the simple amount of the loan and the settlement date of the loan, Using the bankers rule

8. The net price of an item listed for $1,500 after deducting trade discount of 20%, 15% and x% is $969. FInd X

9. AAA and BBB need an additional $6565 for a down payment on a home they hope to buy in 2 years, They invest $808 at the end of each quarter in an account earning6% compounded quarterly. Find the amount of the annuity and the interest earned.

10. Find the value in 2 years time of $4,444 invested at 5% compounded annually. In the following 2 years, the interest rate is expected to rise to 8%. Find the value of the investment at the end of the 4 years period, and find the overall percentage increase.

11. A debt of $5,555 due 5 month ago and another $8,888 due in 12 month are to be settled by making three equal payment. One at the end of the two months, One at the end of six months and the other at the end of ten months. Find the size of payment using. the seconf month as the focal date. Assuming money is worth 9% per annum simple interest.

12. Four years ago John borrowed $3000 from Arlette. The principal with interest at 10% compounded semi-annually is to be repaid six years from the date of the loan. Fifteen month ago, John borrowed another $1500 for 3 and haly year at 9% compounded quarterly. John is now proposing to settle both debts with two equal payment to be made 2 and 3 and half years from now. what should the payment be if money now earns 8% compounded quarterly.

13. Mathew buys a house for $250,000, He makes a 10% down payment and finances the balance through a bank for 25 years. A. if the interest rate is 7% compounded monthly, find the monthly payment that Mathew has to make to settle the loan. How much is the total interest charged? B. Suppose Mathew misses the first four payments. How much should he pay on the fifth month if he wants to settle the outstanding arrears? C. Immediately after paying for 15 years, Mathwe wants to settle the loan in full, How much is the amount he needs to pay?

14. Nania bough a piece of land for $150,000, She made an initial down payment of $40,000 and the balanced is financed through a bank. For the repayment of the bank loan, She has to pay $1975.50 a month. A) If the bank rate is 12% compounded monthly, Find the number of monthly payment that will settle the loan. B) If Nania intends to settle the loan by making a final payment immediately after paying the first 40 monthly payment, Find the value of this payment. What is the total interest payment she has to pay? C) If Nania intends to settle the loan by making a final payment on the 41st payment immediately after paying the first 40 monthly payments, Find the value of this payment.

15a. What is an annuity?

b. Fatimah purchased a house costing $450,000. She made a down payment of 10%, The balance was borrowed from Capital one bank which charges 9% compounded monthly. to setle the loan, Fatimah had to make equal monthly payment for 15 years.

i) How much is the down payment ii) Find Fatimah's Monthly payment iii) Find the total interst that she has to pay.

Problem 5-22 Loan amortization Jan sold her house on December 31and took a $15,000 mortgage as part of the payment. The 10-yearmortgage has a 11% nominal interest rate, but it calls forsemiannual payments beginning next June 30. Next year Jan mustreport on Schedule B of her IRS Form 1040 the amount of interestthat was included in the two payments she received during theyear.

What is the dollar amount of eachpayment Jan receives?

Round your answer to the nearestcent.

How much interest was included inthe first payment?

Round your answer to the nearestcent.

How much repayment of principalwas included?

Round your answer to the nearestcent.

How do these values change forthe second payment?

The portion of the payment thatis applied to interest declines, while the portion of the paymentthat is applied to principal increases.

The portion of the payment thatis applied to interest increases, while the portion of the paymentthat is applied to principal decreases.

The portion of the payment thatis applied to interest and the portion of the payment that isapplied to principal remains the same throughout the life of theloan.

The portion of the payment thatis applied to interest declines, while the portion of the paymentthat is applied to principal also declines.

The portion of the payment thatis applied to interest increases, while the portion of the paymentthat is applied to principal also increases.

How much interest must Jan reporton Schedule B for the first year?

Round your answer to the nearestcent.

Will her interest income be thesame next year? If the payments are constant, why does the amountof interest income change over time?

As the loan is amortized (paidoff), the beginning balance, hence the interest charge, increasesand the repayment of principal increases

As the loan is amortized (paidoff), the beginning balance, hence the interest charge, declinesand the repayment of principal increases

As the loan is amortized (paidoff), the beginning balance, hence the interest charge, declinesand the repayment of principal declines

As the loan is amortized (paidoff), the beginning balance, hence the interest charge, increasesand the repayment of principal declines

As the loan is amortized (paidoff), the beginning balance declines, but the interest charge andthe repayment of principal remain the same.

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