Suppose that you buy new kitchen appliances (i.e. equipment) for your home that costs a total...

Suppose that you buy new kitchen appliances (i.e. equipment) for your home that costs a total of $3,600 but you need to have a loan. The store can give you a loan. You take out a 18-month loan with a 6.25% discount per year.

(a) What are your monthly payments?
(b) How much do you still owe after 12 payments?
(c) What is the total interest you will pay after you have finished paying off your loan?

Solutions

Expert Solution

Loan amount = $;3,600

Interest rate = 6.25% per year

Time = 18 months

a. Assume the monthly payment is $;A.

Monthly payment = $ 210

b. After 12 payments number of payment left to be paid = 18 - 12 = 6

The value after 12th payment can be determined using the following formula

c. Total payment = $ 210 × 18 = $ 3,780

Interest paid = $ 3,780 - 3,600 = $ 180

I have solved it using excel too got the same value kindly refer the attached amortization schedule.

Please contact if having any query will be obliged to you for your generous support. Your help mean a lot to me please help. Thank you

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

You noticed that some of your kitchen appliances at home are defective. Think of the possible...

You noticed that some of your kitchen appliances at home are defective. Think of the possible damages and the ways to fix them. For each damage you need to identify the repair (fixes). You need to find at least 5 defects and 5 fixes. Your answer should be in paragraph format.

You want to buy a new piece of equipment for your business that costs $500,000. You...

You want to buy a new piece of equipment for your business that costs $500,000. You believe you can use the equipment to increase your gross profit by $45,000 each year for the next 15 years. The equipment will be depreciated over 10 years using straight-line depreciation and the half-year convention. Insurance for the new equipment will cost $150 per month. Utility and maintenance expense to support the new equipment will amount to $1,000 per month. Your business’ income tax...

Suppose you serve on the board of directors of SkyBeam, a manufacturer of kitchen appliances that...

Suppose you serve on the board of directors of SkyBeam, a manufacturer of kitchen appliances that recently adopted an lean production philosophy. Part of your responsibility is to develop a compensation contract for May Tagg, the vice-president of manufacturing. To give her the incentive to make decisions that will increase the company's profits, the board decides to give Tagg a year- end bonus if SkyBeam meets a target operating income. Required: Write a memo to Chairperson of the Board, Justin...

Suppose that you decided to buy a new house. The house you want to buy costs...

Suppose that you decided to buy a new house. The house you want to buy costs $520,000 and the interest rate is 7%. You currently have $130,000 and are required to put a 20% down payment plus an additional 3% of the loan amount as closing costs. 1) When will you have enough money for the down payment and closing costs, assuming that the $80,000 is the only investment that you make? 2) Suppose that you plan to buy the...

Suppose that you wish to buy a new home that will cost you $482,472. You must...

Suppose that you wish to buy a new home that will cost you $482,472. You must put $80,000 down, and the bank offers you a 5-year 5.4% APR negative amortization loan with a payments $1,218 per month, and a balloon payment of $67,789 (your 360th payment). How much will your remaining payments be?

Suppose that you wish to buy a new home that will cost you $560,000. You must...

Suppose that you wish to buy a new home that will cost you $560,000. You must put $90,000 down, and will finance the rest at 3.6% APR, making monthly payments for 30 years at the end of each month. However, the loan is structured with a balloon payment of $100,000 in the last month. How much will your remaining monthly payments be?

Suppose that you wish to buy a new home that will cost you $467,043. You must...

Suppose that you wish to buy a new home that will cost you $467,043. You must put $80,000 down, and the bank offers you a 5-year 4.7% APR negative amortization loan with a payments $1,259 per month, and a balloon payment of $55,468 (your 360th payment). How much will your remaining payments be?

Suppose that you wish to buy a new home that will cost you $452,847. You must...

Suppose that you wish to buy a new home that will cost you $452,847. You must put $80,000 down, and the bank offers you a 5-year 5.1% APR negative amortization loan with a payments $1,258 per month, and a balloon payment of $92,233 (your 360th payment). How much will your remaining payments be?

Suppose that you wish to buy a new home that will cost you $420,000. You must...

Suppose that you wish to buy a new home that will cost you $420,000. You must put $84,000 down, and will finance the rest at 4.8% APR, making monthly payments for 30 years at the end of each month. How much of your second payment will be interest? Group of answer choices <1344 1344-1346 1346-1348 1348-1350 >1350

Suppose that you wish to buy a new home that will cost you $400,000. You must...

Suppose that you wish to buy a new home that will cost you $400,000. You must put $80,000 down, and will finance the rest at 4.8% APR, making monthly payments for 30 years at the end of each month. How much of your second payment will be interest?

Subjects