Respuesta :
The question describes retiring a dept though annuity. The present value of an annuity, PV, where periodic payments are made for n periods at r% interest rate at t periods per year is given by
[tex]PV=P\left[\frac{1-\left(1+\frac{r}{t}\right)^{-nt}}{\frac{r}{t}}\right][/tex]
where: PV = $200,000; P = $3,000; r = 4%; t = 12
Part A.
To find, n the number of years it will take to repay the loan, we have
[tex]200,000=3000\left[\frac{1-\left(1+\frac{0.04}{12}\right)^{-12n}}{\frac{0.04}{12}}\right] \\ \\ =3000\left[\frac{1-\left(\frac{301}{300}\right)^{-12n}}{\frac{1}{300}}\right]=900,000\left[1-\left(\frac{301}{300}\right)^{-12n}\right] \\ \\ \Rightarrow\left[1-\left(\frac{301}{300}\right)^{-12n}\right]=\frac{2}{9} \\ \\ \Rightarrow\left(\frac{301}{300}\right)^{-12n}=1-\frac{2}{9}=\frac{7}{9} \\ \\ -12n\log{\left(\frac{301}{300}\right)}=\log{\left(\frac{7}{9}\right)}[/tex]
[tex]\Rightarrow-12n=\frac{\log{\left(\frac{7}{9}\right)}}{\log{\left(\frac{301}{300}\right)}}=-75.52 \\ \\ \Rightarrow n=\frac{-75.52}{-12}=6.29[/tex]
Therefore, it will take 6 years and 4 months to repay the loan.
Part B.
Total amount paid for the loan including interest is given by the formular
[tex]A=P\left[\frac{\left(1+\frac{r}{t}\right)^{nt}-1}{\frac{r}{t}}\right][/tex]
where: P = $3,000; r = 4%; t = 12; n = 6.29332634
[tex]A=3000\left[\frac{\left(1+\frac{0.04}{12}\right)^{6.29332634\times12}-1}{\frac{0.04}{12}}\right] \\ \\ =3000\left[\frac{0.285714286}{0.003333333333}\right]=3000(85.7142858)=\$257,142.86[/tex]
Total amount paid as at the month before the last payment (i.e. after 6 years 3 months) is given by
[tex]A=3000\left[\frac{\left(1+\frac{0.04}{12}\right)^{6.25\times12}-1}{\frac{0.04}{12}}\right] \\ \\ =3000\left[\frac{0.283491702}{0.003333333333}\right]=3000(85.04751061)=\$255,142.53[/tex]
Therefore, the amount paid in the final payment is $257,142.86 - $255,142.53 = $2,000.33 or approximately $2,000
Part C.
The amount of interest she will pay for her loan is given by the total amount payed for the duration of the loan less the loan amount.
Therefore, interest = $257,142.86 - $200,000 = $57,142.86
Part D.
If she made a 15% down payment, then amount to be repaid is given by
[tex]200000 - \frac{15}{100}\times200000=200000-30,000=\$170,000[/tex]
Thus, the number of periods for the repayment is given by
[tex]170,000=3000\left[\frac{1-\left(1+\frac{0.04}{12}\right)^{-12n}}{\frac{0.04}{12}}\right] \\ \\ =3000\left[\frac{1-\left(\frac{301}{300}\right)^{-12n}}{\frac{1}{300}}\right]=900,000\left[1-\left(\frac{301}{300}\right)^{-12n}\right] \\ \\ \Rightarrow\left[1-\left(\frac{301}{300}\right)^{-12n}\right]=\frac{17}{90} \\ \\ \Rightarrow\left(\frac{301}{300}\right)^{-12n}=1-\frac{17}{90}=\frac{73}{90} \\ \\ -12n\log{\left(\frac{301}{300}\right)}=\log{\left(\frac{73}{90}\right)}[/tex]
[tex]\Rightarrow-12n=\frac{\log{\left(\frac{73}{90}\right)}}{\log{\left(\frac{301}{300}\right)}}=-62.91 \\ \\ \Rightarrow n=\frac{-62.91}{-12}=5.24[/tex]
If she made a 15% down payment, it will take her 5 years 3 months to complete the payment.
Part E.
If she have obtained a loan of 3% / annum compounded monthly. Total payment to be made at 3% interest is given by
[tex]A=3000\left[\frac{\left(1+\frac{0.03}{12}\right)^{6.29332634\times12}-1}{\frac{0.04}{12}}\right] \\ \\ =3000\left[\frac{0.207514582}{0.0025}\right]=3000(83.00583299)= \\ \\ \$249,017.50[/tex]
Therefore, she will save $257,142.86 - $249,017.50 = $8,125.36
[tex]PV=P\left[\frac{1-\left(1+\frac{r}{t}\right)^{-nt}}{\frac{r}{t}}\right][/tex]
where: PV = $200,000; P = $3,000; r = 4%; t = 12
Part A.
To find, n the number of years it will take to repay the loan, we have
[tex]200,000=3000\left[\frac{1-\left(1+\frac{0.04}{12}\right)^{-12n}}{\frac{0.04}{12}}\right] \\ \\ =3000\left[\frac{1-\left(\frac{301}{300}\right)^{-12n}}{\frac{1}{300}}\right]=900,000\left[1-\left(\frac{301}{300}\right)^{-12n}\right] \\ \\ \Rightarrow\left[1-\left(\frac{301}{300}\right)^{-12n}\right]=\frac{2}{9} \\ \\ \Rightarrow\left(\frac{301}{300}\right)^{-12n}=1-\frac{2}{9}=\frac{7}{9} \\ \\ -12n\log{\left(\frac{301}{300}\right)}=\log{\left(\frac{7}{9}\right)}[/tex]
[tex]\Rightarrow-12n=\frac{\log{\left(\frac{7}{9}\right)}}{\log{\left(\frac{301}{300}\right)}}=-75.52 \\ \\ \Rightarrow n=\frac{-75.52}{-12}=6.29[/tex]
Therefore, it will take 6 years and 4 months to repay the loan.
Part B.
Total amount paid for the loan including interest is given by the formular
[tex]A=P\left[\frac{\left(1+\frac{r}{t}\right)^{nt}-1}{\frac{r}{t}}\right][/tex]
where: P = $3,000; r = 4%; t = 12; n = 6.29332634
[tex]A=3000\left[\frac{\left(1+\frac{0.04}{12}\right)^{6.29332634\times12}-1}{\frac{0.04}{12}}\right] \\ \\ =3000\left[\frac{0.285714286}{0.003333333333}\right]=3000(85.7142858)=\$257,142.86[/tex]
Total amount paid as at the month before the last payment (i.e. after 6 years 3 months) is given by
[tex]A=3000\left[\frac{\left(1+\frac{0.04}{12}\right)^{6.25\times12}-1}{\frac{0.04}{12}}\right] \\ \\ =3000\left[\frac{0.283491702}{0.003333333333}\right]=3000(85.04751061)=\$255,142.53[/tex]
Therefore, the amount paid in the final payment is $257,142.86 - $255,142.53 = $2,000.33 or approximately $2,000
Part C.
The amount of interest she will pay for her loan is given by the total amount payed for the duration of the loan less the loan amount.
Therefore, interest = $257,142.86 - $200,000 = $57,142.86
Part D.
If she made a 15% down payment, then amount to be repaid is given by
[tex]200000 - \frac{15}{100}\times200000=200000-30,000=\$170,000[/tex]
Thus, the number of periods for the repayment is given by
[tex]170,000=3000\left[\frac{1-\left(1+\frac{0.04}{12}\right)^{-12n}}{\frac{0.04}{12}}\right] \\ \\ =3000\left[\frac{1-\left(\frac{301}{300}\right)^{-12n}}{\frac{1}{300}}\right]=900,000\left[1-\left(\frac{301}{300}\right)^{-12n}\right] \\ \\ \Rightarrow\left[1-\left(\frac{301}{300}\right)^{-12n}\right]=\frac{17}{90} \\ \\ \Rightarrow\left(\frac{301}{300}\right)^{-12n}=1-\frac{17}{90}=\frac{73}{90} \\ \\ -12n\log{\left(\frac{301}{300}\right)}=\log{\left(\frac{73}{90}\right)}[/tex]
[tex]\Rightarrow-12n=\frac{\log{\left(\frac{73}{90}\right)}}{\log{\left(\frac{301}{300}\right)}}=-62.91 \\ \\ \Rightarrow n=\frac{-62.91}{-12}=5.24[/tex]
If she made a 15% down payment, it will take her 5 years 3 months to complete the payment.
Part E.
If she have obtained a loan of 3% / annum compounded monthly. Total payment to be made at 3% interest is given by
[tex]A=3000\left[\frac{\left(1+\frac{0.03}{12}\right)^{6.29332634\times12}-1}{\frac{0.04}{12}}\right] \\ \\ =3000\left[\frac{0.207514582}{0.0025}\right]=3000(83.00583299)= \\ \\ \$249,017.50[/tex]
Therefore, she will save $257,142.86 - $249,017.50 = $8,125.36
