The home equity lon payment is based on 10.49 % APR annualized over a 10-year term....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The home equity loán payment is based on 10.49 % APR annualized over a 10-year term. 1. If you borrow $25,000 at a rate of 10.49% and make monthly payments of $218.54, how much money will still be owed after 10 years? Use the steps below to answer this question. L. How much will $25,000 accrue to in 10 years at the interest rate of 10.49% compounded monthly? II. If you make monthly payments of $218.54, what is the future value of your payments, with the interest rate of 10.49%? Ill. The amount owed is the difference of steps I) and II). 2. How much is paid during the 10 years? 3. How much would the payment have to be for the debt of $25,000 to be paid off in the 10 years? 4. How long would it take to pay off the debts under the original plan if interest were 15% on each loan? Loan Type Bank cards Auto loan Department store cards Discover home equity line of credit Total Current Monthly Payment Discover Home Equity Example Loan Amount $10,000 $12,500 $2,500 $25,000 Source: Discover Loan Center mailer Monthly Loan Payment Amount $186.00 PAID OFF $320.03 PAID OFF $78.63 PAID OFF $25,000 $584.66 $25,000 Monthly Payment NONE NONE NONE $218.54 $218.54 The home equity loán payment is based on 10.49 % APR annualized over a 10-year term. 1. If you borrow $25,000 at a rate of 10.49% and make monthly payments of $218.54, how much money will still be owed after 10 years? Use the steps below to answer this question. L. How much will $25,000 accrue to in 10 years at the interest rate of 10.49% compounded monthly? II. If you make monthly payments of $218.54, what is the future value of your payments, with the interest rate of 10.49%? Ill. The amount owed is the difference of steps I) and II). 2. How much is paid during the 10 years? 3. How much would the payment have to be for the debt of $25,000 to be paid off in the 10 years? 4. How long would it take to pay off the debts under the original plan if interest were 15% on each loan? Loan Type Bank cards Auto loan Department store cards Discover home equity line of credit Total Current Monthly Payment Discover Home Equity Example Loan Amount $10,000 $12,500 $2,500 $25,000 Source: Discover Loan Center mailer Monthly Loan Payment Amount $186.00 PAID OFF $320.03 PAID OFF $78.63 PAID OFF $25,000 $584.66 $25,000 Monthly Payment NONE NONE NONE $218.54 $218.54
Expert Answer:
Answer rating: 100% (QA)
Step 1 Calculate the future value of the loan The future value of the loan is the amount of money that will be owed after 10 years including interest ... View the full answer
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
Posted Date:
Students also viewed these finance questions
-
Examine whether the following functions are differentiable at x = 0: f(x) = { x" sin, if x 0 0, if x = 0 for n = 0, 1, 2, and 3.
-
The relationship between money today and money in the future is called the interest rate. This is similar to an exchange rate when we convert for example pounds into Chinese RMB. Value today is also...
-
Define C2C e-commerce. What role can private forwarding addresses play in the C2C e-commerce marketplace?
-
An object is placed a distance r in front of a wall, where r exactly equals the radius of curvature of a certain concave mirror. At what distance from the wall should this mirror be placed so that a...
-
The drawing shows a snapshot of a transverse wave moving to the left on a string. The wave speed is 10.0 m/s. At the instant the snapshot is taken, (a) in what direction is point A moving? (b) In...
-
The alternate hypothesis for a goodness-of-fit test says that some of the probabilities differ from those specified by the null hypothesis. In Exercises 11 and 12, determine whether the statement is...
-
A publishing house publishes three weekly magazinesDaily Life, Agriculture Today, and Surfs Up. Publication of one issue of each of the magazines requires the following amounts of production time and...
-
Historically the S&P 500 Index has returned about 8% a year but retums are very uneven as recent experience has reminded us - the INDEX declined by more than 50% from its peak in 2007 and took 7...
-
Dionne earns $15.30 per hour at Jolly Creamery. Compute the pay under both the hundredth-hour and quarter-hour systems. The company is considering switching from a quarter-hour method to a...
-
Budget Assignment Part 1 I Transcona Manufacturing operates in Winnipeg and produces and distributes a special type of chemical compound called Compound WX which is an essential product used in home...
-
HydroLift is trying to determine how long it takes for one product to pass through the production process. The following information was gathered regarding how many days the product spent in various...
-
Galaxy Co has 200,000 ordinary shares in issue throughout the year ended 31 January 20X1. It also has convertible loan stock in issue at 31 January 20X1 on which interest of 30,000 Euros was charged...
-
Evaluate the effectiveness of legal and non-legal mechanisms in encouraging cooperation and resolving issues concerning consumers. (25 marks) You must incorporate one international measure...
-
How do advanced systems theory perspectives illuminate the systemic nature of role conflict within complex organizations, and what systemic interventions can organizations implement to redesign...
-
The Harmon Corporation manufactures bats with Larry Walker's autograph stamped on them. Each bat sells for $33 and has a variable cost of $18. There is $30,000 in fixed costs involved in the...
-
If Johanna deposits $1,000 in a savings account that yields 12% compounded quarterly, what will our investment grow to at the end of 4 years?
-
Explain why each of the following is either a private good or a public good: traffic lights, in line skates, a city park, a chicken salad sandwich, a tennis racket, national defense, a coastal...
-
Your retirement planning suggests a goal of $57,000 a year in today's dollars for 30 years of retirement. Retirement will begin 35 years from today, at which time you will expect your first annuity...
-
Jim Thorpe borrows $70,000 toward the purchase of a home at 12 percent interest. His mortgage is for 30 years. a. How much will his annual payments be? (Although home payments are usually on a...
-
What does risk taking have to do with the use of operating and financial leverage?
-
What forms of business organization are permitted under Rule 505-Form of Practice and Firm Name?
-
There currently are thirteen Rules of Conduct. Listed below are circumstances pertaining to some of these rules: 1. A member shall exercise due professional care in the performance of an engagement....
-
a. What aspects of a company's financial statements are covered in the first three reporting standards? b. What is the objective of the fourth standard of reporting?
Study smarter with the SolutionInn App