# Follow the instructions in the NET @ssets box at the beginning of Section 14.1 for accessing and

## Question:

Follow the instructions in the NET @ssets box at the beginning of Section 14.1 for accessing and using the Loan Amortization Chart in this textbook’s Web site. Use this chart and its associated report to solve:

a.Problem 21.

b. Problem 22.

**Data From Problem 21:**

Ms. Esperanto obtained a $40,000 home equity loan at 7.5% compounded monthly.

a. What will she pay monthly if the amortization period is 15 years?

b. How much of the payment made at the end of the fifth year will go towards principal and how much will go towards interest?

c. What will be the balance on the loan after five years?

d. How much interest did she pay during the fifth year?

**Data From Problem 22:**

Elkford Logging’s bank will fix the interest rate on a $60,000 loan at 8.1% compounded monthly for the first four-year term of an eight-year amortization period. Monthly payments are required on the loan.

a. If the prevailing interest rate on four-year loans at the beginning of the second term is 7.5% compounded monthly, what will be the monthly payments for the last four years?

b. What will be the interest portion of the twenty-third payment?

c. Calculate the principal portion of the fifty-third payment.

## Step by Step Answer:

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