MT 1123 Lecture Notes - Amortization Schedule

8 views1 pages
MTH 124 Section 3.4
(
)
11
n
i
FV PMT
i
+−
=
(
)
11 n
i
PV PMT
i
−+
= r
i
m
=
nmt=
Example 0
How much money should you have in an account if you’d like to be able to
withdraw $2,000 every quarter for three years? The account pays 6% interest
compounded quarterly.
Example 1
You wish to set up an annuity, pay into it for 30 years and then receive a
monthly stipend of $500 from it for 20 years. If the interest rate is 6.5%
compounded monthly, how much are your monthly deposits?
Example 2
You buy a car using an $8,000 loan over 5 years at 0.5% monthly interest.
What is your payment? Setup an amortization schedule for the first 6 months.
Amortization Table
Payment # Payment Interest Balance
Reduction
Balance
Example 3
You took out a 30 year mortgage at 7% interest compounded monthly on a
$120,000 house. You put a down-payment of 8% when you purchased the house
and after 10 years you want to sell it. What is the unpaid balance of the loan?
If the house is worth $150,000 after the 10 years, how much equity do you
have in the house?
Unlock document

This preview shows half of the first page of the document.
Unlock all 1 pages and 3 million more documents.

Already have an account? Log in

Document Summary

Mth 124 section 3. 4 i r m n mt= How much money should you have in an account if you"d like to be able to. Example 1 monthly stipend of from it for 20 years. You wish to set up an annuity, pay into it for 30 years and then receive a. You buy a car using an ,000 loan over 5 years at 0. 5% monthly interest. Setup an amortization schedule for the first 6 months. You took out a 30 year mortgage at 7% interest compounded monthly on a. You put a down-payment of 8% when you purchased the house and after 10 years you want to sell it.

Get access

Grade+20% OFF
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers