This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: If you borrow 5,000 at an annual interest rate of 9.0 for six years, what will your repayment(s) be ... (Read 82 times)

sdfghj

  • Hero Member
  • *****
  • Posts: 552
on: Jul 10, 2018
If you borrow 5,000 at an annual interest rate of 9.0 for six years, what will your repayment(s) be if this is an interest-only loan?
 
  What will be an ideal response?

Question 2

Assume a five-year equal payment amortization schedule with an annual interest rate of 12 and annual payments. If the beginning principal is 8,000, then the first interest payment will be how large?
 
  A) 960.00
  B) 1,200.00
  C) 2,219.28
  D) There is not enough information to answer this question.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

jackie

  • Sr. Member
  • ****
  • Posts: 324
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: Annual payments for the first five years of interest only = (r)  (PV) = .09  5,000 = 450.00. The final payment in year 6 will be the last interest payment plus the principal amount = 450 + 5,000 = 5,450.

Answer to Question 2

Answer: A
Explanation: A) The first payment will be equal to the beginning balance times the annual interest rate = 8,000  .12 = 960.00.


sdfghj

  • Member
  • Posts: 552
Reply 2 on: Jul 10, 2018
Wow, this really help

robbielu01

  • Member
  • Posts: 336
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

Hip fractures are the most serious consequences of osteoporosis. The incidence of hip fractures increases with each decade among patients in their 60s to patients in their 90s for both women and men of all populations. Men and women older than 80 years of age show the highest incidence of hip fractures.

Did you know?

Atropine was named after the Greek goddess Atropos, the oldest and ugliest of the three sisters known as the Fates, who controlled the destiny of men.

Did you know?

People often find it difficult to accept the idea that bacteria can be beneficial and improve health. Lactic acid bacteria are good, and when eaten, these bacteria improve health and increase longevity. These bacteria included in foods such as yogurt.

Did you know?

Drugs are in development that may cure asthma and hay fever once and for all. They target leukotrienes, which are known to cause tightening of the air passages in the lungs and increase mucus productions in nasal passages.

Did you know?

There are 60,000 miles of blood vessels in every adult human.

During their annual migration, the entire population of Arctic terns move from the Arctic Ocean in t During their annual migration, the entire population of Arctic terns move from the Arctic Ocean in t
Possible Earth 5 billion years from now Possible Earth 5 billion years from now
During drought years on the Galapagos, small, easily eaten seeds become rare, le During drought years on the Galapagos, small, easily eaten seeds become rare, le
Midway Island, an inhospitable atoll acquired in 1867, was valuable as a military base located midwa Midway Island, an inhospitable atoll acquired in 1867, was valuable as a military base located midwa
Nick buys a $25 000, 5.4% bond with quarterly interest coupons, 3 years before maturity, to ... Nick buys a $25 000, 5.4% bond with quarterly interest coupons, 3 years before maturity, to ...
Americium-243 has a decay constant of 9.39 × 10-5 years-1. How long will it take Americium-243 has a decay constant of 9.39 × 10-5 years-1. How long will it take
Video: Cerebral Cortex Animation

For a complete list of videos, visit our video library