Question

In: Accounting

1. You have an initial amortizing loan (similar to mortgage) of $250,000, to be repaid In...

1. You have an initial amortizing loan (similar to mortgage) of $250,000, to be repaid In equal 30 payments, over 30 years. The annual interest rate is 8%. What is the amount of each annual payment equal to?

A.28,120

B.21,265

C.22,206

D.22,441

2.You have an initial amortizing loan (similar to a mortgage) of $250,000, to be repaid in equal 30 payments, over 30 years. The annual interest rate 8%. What is the amount of INTEREST you will pay at the end of year 16?

A.15,724

B.14,646

C.14,041

D.15,206

You have an initial amortizing load (similar to a mortgage) of $250,000, to be repaid in equal 30 payments, over 30 years. The annual interest rate is 8%. What is the amount of principle you will pay at the end of year 20?

A.11,108

B.9,524

C.10,286

D.8,818

Expert Solution

1). Annual payment for $250000 is = 250000/PVAF 8% 30years
=250000/11.2578 = $22206.8
So the answer is $22206

2). Let's ,make a chart of the loan repayment.
Here the payment of Interest in chart at the end of year 16 is $15208.69 which is similar to D. $15206

3).Amount of principle to be paid at the end of year 20 is 22206-12685.56 = 9520.44 which is similar to B . $9524
( here differences in amount are due to rounding off in calculations in EMI and excel calculations).

ekkarill92 answered 1 year ago

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