Question
In: Finance
A loan is to be repaid in end of quarter payments of $1,000 each, with there...
A loan is to be repaid in end of quarter payments of $1,000 each, with there being 20 end of quarter payments total. The interest rate for the first two years is 6% convertible quarterly, and the interest rate for the last three years is 8% convertible quarterly. Find the outstanding loan balance right after the 6th payment.
Solutions
Expert Solution
| Particulars | Amount | Present value |
| Last three year quarterly payment | $ 1,000.00 | |
| × present value annuity factor at the beginning of third year | 10.57534 | |
| Present value at beginning of third year | $ 10,575.34 | |
|
× present value factor [6%, 0.5 years] converted qtrly |
0.97066 | |
| Present value of last 12 payments | $ 10,265.08 | $ 10,265.08 |
| 7th and 8th payments | $ 1,000.00 | |
| × present value annuity factor at the beginning of 7th payment | 1.95588 | |
| Present value at beginning of 7th payment | $ 1,955.88 | |
|
× present value factor [6%, 1.5 years] converted qtrly |
1.00000 | |
| Present value of last 12 payments | $ 1,955.88 | $ 1,955.88 |
| Total present value |
$ 12,220.96 |
Answer is $12,220.96
jeff jeffy answered 3 years agoRelated Solutions
A loan is to be repaid by twenty end of quarter payments of $1,000. The interest...
A loan is to be repaid by twenty end of quarter payments of
$1,000. The interest rate for the first two years is 6% convertible
quarterly, and last three years is 8% convertible quarterly. Find
the outstanding loan balance just after the 5th
payment.
Please don't use Excel! I'm looking to learn how to do it with
the formulas.
A loan is being repaid with 20 payments of $ 1,000 at the end of each...
A loan is being repaid with 20 payments of $ 1,000 at the end of
each quarter. Given that the nominal rate of interest is 8% per
year compounded quarterly, find the outstanding balance of the loan
immediately after 10 payments have been made (a) by the prospective
method, (b) by the retrospective method.
A 30-year loan of 1,000 is repaid with payments at the end of each year. Each...
A 30-year loan of 1,000 is repaid with payments at the end of
each year. Each of the first ten payments equals the amount of
interest due. Each of the next ten payments equals 150% of the
amount of interst due. Each of the last ten payments is X. The
lender charges interest at an annual effective rate of 10%.
Calculate X.
A loan of 10000$ is to be repaid with annual payments, at the end of each...
A loan of 10000$ is to be repaid with annual payments, at the
end of each year, for the next 20 years. For the rst 5 years the
payments are k per year ; the second 5 years, 2k per year ; the
third 5 years, 3k per year ; and the fourth 5 years, 4k per year.
(a) Draw two timelines describing this series of payments. (b) For
each of the timelines in (a), find an expression for k...
A 10-year loan of 120,000 is to be repaid with payments at the end of each...
A 10-year loan of 120,000 is to be repaid with payments at the
end of each month. Interest is at an annual effective rate of
6.00%.
The first monthly payment is 800. Each additional payment will
be k more than the previous month payment. Find
k.
A loan of $5000 is repaid with annual payments at the end of each year of...
A loan of $5000 is repaid with annual payments at the end of
each year of $1200,$800,$1300 and X. Assume the loan has 10%
effective interest per year. a) Determine X b) Determine the amount
of interest paid with the third payment.
A loan of $12,000 is being repaid with payments of $1,500 at the end of each...
A loan of $12,000 is being repaid with payments of $1,500 at the
end of each year for 10 years. These payments can earn interest at
an effective rate of 6% per annum. At the end of the year, this
interest is reinvested at the annual effective rate 5% for the
first 6 years and only 4% for the second 4 years. Find the yield
rate over the 10-year period.
A 30-year loan of 1100 is repaid with payments at the end of each year. Each...
A 30-year loan of 1100 is repaid with payments at the end of
each year.
Each of the first fifteen payments equals 155% of the amount of
interest due. Each of the last fifteen payments is X.
The lender charges interest at an annual effective rate of 8%.
Calculate X
a. 57
b. 65
c. 77
d. 82
e. 46
a 30 year loan of 1000 is repaid with payments at the end of each year....
a 30 year loan of 1000 is repaid with payments at the end of
each year. Each of the first 10 payments equals the amount of
interest due. Each of the next 10 payments equals 150% of the
amount of interest due. Each of the last 10 payments is X. The
lender charges interest at an effective annual rate of 10%.
Calculate X.
please explain, having much trouble with this problem,
Thanks!
A $1000 loan is being repaid with level payments at the end of each year for...
A $1000 loan is being repaid with level payments at the end of
each year for 4 years using a sinking fund method. The loan has 10%
effective interest per year and the sinking fund has 8% interest per
year. Create a sinking fund table for this payment plan. Include a
column for the period, interest paid that period, sinking fund
deposit that period, interest earned in the sinking fund that
period and the balance in the sinking fund at...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Write a Java Program using the following instruction: Create the following 3 methods that calculate and...
- How would the S/D curves shift if a $3 tax was imposed on suppliers for each...
- Why should a time-based authentication system invalidate the current password on a successful authentication?
- Explain the difference between a market penetration strategy and a market development strategy.
- QUESTION 4 Discuss the sanctity of life versus the quality of life debate as presented by...
- 0.560 g He, 20.482 g F2, and 13.960 g Ar are placed in a 18.4-L container...
- Let X ∼ Pois(4), Y ∼ Pois(12), U ∼ Pois(3) be independent random variables. a) What...
ADVERTISEMENT