Kevin takes out a loan of 2000 dollars to buy a car at an effective annual...

Kevin takes out a loan of 2000 dollars to buy a car at an effective annual rate of interest of 6%. He repays the loan by making level annual payments at the end of each year for 10 years, using the amortization method. Find the outstanding loan balance at the end of the 1st year just after the 1st payment is paid

Solutions

Expert Solution

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

Eliza takes out a $36,000 loan at an annual effective interest rate of 6%. It is...

Eliza takes out a $36,000 loan at an annual effective interest rate of 6%. It is agreed that at the end of each of the first six years she will pay $1,800 in principal, along with the interest due, and that at the end of each of the next eight years she will make level payments of $2,500. Eliza will make on final payment at the end of fifteen years to exactly complete her loan obligation. Calculate the amount of...

Jenny takes out a 10-year loan of 100,000 at an annual effective rate of 8%. At...

Jenny takes out a 10-year loan of 100,000 at an annual effective rate of 8%. At the end of each year Jenny makes interest payments to the lender and sinking fund deposits into a sinking fund earning 6% annual effective. Jenny's first sinking fund deposit is $1000 and the remaining deposits are level. a) Find the total (net) interest paid on the loan. b) How would the total (net) interest paid on the loan change if the interest rate on...

Susana takes out a $1,000 loan. The loan carries a 10% annual interest rate and it...

Susana takes out a $1,000 loan. The loan carries a 10% annual interest rate and it will be amortized with fixed annual payments over a five-year period. Construct the amortization schedule for this loan? What is the fraction of the fixed payment represent the repayment of principal in year 2? Assume Annual Compounding Show Formula Find Annual Payment Create Amortization Table Show fraction of the fixed payment represents the repayment of principal in year 2

Donald takes out a loan to be repaid with annual payments of $500 at the end...

Donald takes out a loan to be repaid with annual payments of $500 at the end of each year for 2n years. The annual effective interest rate is 4.94%. The sum of the interest paid in year 1 plus the interest paid in year n + 1 is equal to $720. Calculate the amount of interest paid in year 10.

Nikita takes out a 10-year loan. The loan is repaid by making 10 annual repayments at...

Nikita takes out a 10-year loan. The loan is repaid by making 10 annual repayments at the end of each year. The first loan repayment is equal to X, with each subsequent repayment 10.16% greater than the previous year’s repayment. The annual effective interest rate being charged on the loan is 8%. The amount of interest repaid during the first year is equal to 892.20. Calculate X. a.1100 b.1150 c.1200 d.1250 e.1300

You took out a loan to buy a new car. The monthly interest rate on the...

You took out a loan to buy a new car. The monthly interest rate on the loan is 1%. You have to pay $270 every month for 60 months. Attempt 1/5 for 8 pts. Part 1 What is the present value of the cash flows if it's an ordinary annuity? Attempt 1/5 for 8 pts. Part 2 What is the future value of the cash flows if it's an ordinary annuity? Attempt 1/5 for 10 pts. Part 3 What is...

You buy a car for $40,000. You agree to a 6 year loan with a annual...

You buy a car for $40,000. You agree to a 6 year loan with a annual interest 6 percent. a. What is your required monthly payment? b. What is the total amount interest payment over this period? C. Show the difference in the total interest payment if the payment was done yearly instead of monthly?

You borrow $7083 to buy a car. This is a 38-month loan with an annual rate...

You borrow $7083 to buy a car. This is a 38-month loan with an annual rate of 4.04%. What is your required monthly payment? Round to the nearest $0.01 (e.g., if your answer is $385.4789, record it as 385.48). Do this on excel and explain how to do it please.

If you take out a car loan for $35,000, will pay an annual interest rate of...

If you take out a car loan for $35,000, will pay an annual interest rate of 4% on the loan, and make monthly payments of $547.58, how many payments will you need to make? -What are you solving for? -What is your answer?

1.A student takes out a college loan of $5000 at an annual percentage rate of 3%,...

1.A student takes out a college loan of $5000 at an annual percentage rate of 3%, compounded monthly. a. If the student makes payments of $1000 per month, how much, to the nearest dollar, does the student owe after 4 months? Don't round until the end. b. After how many months will the loan be paid off? 2. Suppose you start with one liter of vinegar and repeatedly remove 0.08 L, replace with water, mix, and repeat. a. Find a...

Subjects