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 42 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
Thanks for the timely response, appreciate it

diana chang

  • Member
  • Posts: 288
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

An identified risk factor for osteoporosis is the intake of excessive amounts of vitamin A. Dietary intake of approximately double the recommended daily amount of vitamin A, by women, has been shown to reduce bone mineral density and increase the chances for hip fractures compared with women who consumed the recommended daily amount (or less) of vitamin A.

Did you know?

Symptoms of kidney problems include a loss of appetite, back pain (which may be sudden and intense), chills, abdominal pain, fluid retention, nausea, the urge to urinate, vomiting, and fever.

Did you know?

Chronic necrotizing aspergillosis has a slowly progressive process that, unlike invasive aspergillosis, does not spread to other organ systems or the blood vessels. It most often affects middle-aged and elderly individuals, spreading to surrounding tissue in the lungs. The disease often does not respond to conventionally successful treatments, and requires individualized therapies in order to keep it from becoming life-threatening.

Did you know?

The U.S. Preventive Services Task Force recommends that all women age 65 years of age or older should be screened with bone densitometry.

Did you know?

The U.S. Pharmacopeia Medication Errors Reporting Program states that approximately 50% of all medication errors involve insulin.

History of the number of observed sunspots during the last 250 years, which shows the ~11-year solar History of the number of observed sunspots during the last 250 years, which shows the ~11-year solar
The proportion of obese and extremely obese adults in the United States has increased over the past The proportion of obese and extremely obese adults in the United States has increased over the past
Checklist of Developmental Skills: Birth to 5 years Cont. Checklist of Developmental Skills: Birth to 5 years Cont.
Spring force, crankcase pressure, and intake manifold vacuum work together to regulate the flow rate ... Spring force, crankcase pressure, and intake manifold vacuum work together to regulate the flow rate ...
How to convert units of any rate to another (Part 3) How to convert units of any rate to another (Part 3)
For each function f(x) = 6x^2 - 4, estimate the instantaneous rate of change for the given ... For each function f(x) = 6x^2 - 4, estimate the instantaneous rate of change for the given ...
Video: Morphology of a tomato plant

For a complete list of videos, visit our video library