Assume a lender offers you a $45,000, 10%, 6- YEARS loan that is to be fully...

Assume a lender offers you a $45,000, 10%, 6- YEARS loan that is to be fully amortized with 6 annual payments. The first payment will be due one year from the loan date. How much will you have to pay each year?

Expert Solution

Annual Payment= [P x R x (1+R)^N]/[(1+R)^N-1]

Where,

P= Loan Amount

R= Interest rate per period

N= Number of periods

= [ $45000x0.1 x (1+0.1)^6]/[(1+0.1)^6 -1]

= [ $4500( 1.1 )^6] / [(1.1 )^6 -1

=$10332.33

jeff jeffy answered 2 years ago

6-Assume that you are 10 years into a 30 year home loan at 5%. You owe...

6-Assume that you are 10 years into a 30 year home loan at 5%. You owe $200,000 left on your home at this time. You can refinance your loan at 4% for 20 years; however the TOTAL closing costs will be around $3,000. If you go for refinancing, how many more months would you need to live in the home in order to get the closing cost back? Ignore time value of money and tax credits of the interest payments...

The lender offers the following terms on the commercial loan of $1,500,000: the loan amortization period...

The lender offers the following terms on the commercial loan of $1,500,000: the loan amortization period is 30 years, interest rate is 7.5%, the payments are to be made monthly and the loan matures in 5 years. Prepare an annual debt service table, with beginning balance principal, interest, ending balance and total debt service rows for 5 years. Which line item is tax deductible? If the loan origination fees are 1.5% and due upon closing, what is the dollar value...

Assume that you are 10 years into a 30 year home loan at 5%. You owe...

Assume that you are 10 years into a 30 year home loan at 5%. You owe $200,000 left on your home at this time. You can refinance your loan at 4% for 20 years; however the TOTAL closing costs will be around $3,000. If you go for refinancing, how many more months would you need to live in the home in order to get the closing cost back? Ignore time value of money and tax credits of the interest payments...

A lender offers you a fixed-rate mortgage for $430,000 at 6.750% for 26 years with 4.75...

A lender offers you a fixed-rate mortgage for $430,000 at 6.750% for 26 years with 4.75 discount points due at closing (monthly payments and monthly compounding). If you prepay the loan at the end of year ten (10), what is the effective borrowing cost of the loan?

A fully amortizing mortgage loan is made for $200,000 at 6 percent interest for 30 years....

A fully amortizing mortgage loan is made for $200,000 at 6 percent interest for 30 years. Payments are to be made monthly. (Ignore origination fee and other fees). a. Using Excel, construct fully amortizing mortgage loan table including beginning balance, payment, interest, principal, and ending balance. (Please check your ending balance by using PV function in Excel) b. Interest and principal payments during month 1. c. Total Principal and total interest paid over 30 years. d. The outstanding loan balance...

The following loan is fully amortizing. The loan is for $13,000 at 10% interest to be...

The following loan is fully amortizing. The loan is for $13,000 at 10% interest to be repaid over three (3) years. Amortize this loan on a monthly basis. Calculate the interest portion of the fourth (4th) payment considering that an additional payment of $2,000 was made with the second payment.

Assume you have a student loan that you will pay off in 10 years. How much...

Assume you have a student loan that you will pay off in 10 years. How much will you save in interest if you refinance at the new rate? Use the accompanying table of monthly payments on a $1,000 loan. Amount of Loan Original Rate New Rate $19,000 10% 8% The total savings in interest will be?

Lender Scenario: You are the loan officer for a commercial lender. You have just received a...

Lender Scenario: You are the loan officer for a commercial lender. You have just received a request from the company you are researching to provide loan funds that will allow the company to buy back 3% of its outstanding common stock. The company has indicated to you that it feels their stock is undervalued at this time. What is your response to their request? What will this do to the company’s various debt and equity ratios? Given the competition, should...

1. You get a $15,000 car loan for 4 years at 6.75% interest. The lender charges...

1. You get a $15,000 car loan for 4 years at 6.75% interest. The lender charges $250 for an origination fee (which is added to your loan amount). What is your APR? 2. You buy furniture for $2,500. You pay $300 down and the retailer finances the remainder with 36 monthly payments of $80. Calculate your APR.

Roseanne wants to borrow $40,000 for a period of five years. The lender offers her a...

Roseanne wants to borrow $40,000 for a period of five years. The lender offers her a choice if 3 payment structures. The first one; pay all of the interest (10%) and principal in one lump sum at the end of five years. The second; pay interest at the rate of 10% for 4 years and then a final payment of interest and principal at the end of the fifth year. The third payment would be to pay five equal payments...

Question