Problem 1 An adjustable interest loan was taken by David Walker for a sum of $20,000 for 10 years. The monthly interest rate was 1% with monthly compounding. After the first 60 months payments were made, for the remaining 60 months, the interest rate for the remaining balance of the loan at that time was reduced to %2% for the last 60 payments. Determine: a. the monthly payments for the first 60 months. b. the loan balance immediately after the 60th payment was made, and c. the monthly payments for the last 60 months.

Problem 1 An adjustable interest loan was taken by David Walker for a sum of $20,000 for 10 years. The monthly interest rate was 1% with monthly compounding. After the first 60 months payments were made, for the remaining 60 months, the interest rate for the remaining balance of the loan at that time was reduced to %2% for the last 60 payments. Determine: a. the monthly payments for the first 60 months. b. the loan balance immediately after the 60th payment was made, and c. the monthly payments for the last 60 months.

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)

6th Edition

ISBN:9781337117005

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 9FPE

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