A recent engineering graduate is relocating after 3 years on the job. History shows that subsequent assignments
Question:
A recent engineering graduate is relocating after 3 years on the job. History shows that subsequent assignments with the company last for 4 to 6 years before moving on to a new location for additional experience and broadening. The graduate wishes to buy a new home costing \($200\),000, make a 5 percent down payment, and finance the remaining \($190\),000. The rate quoted for a conventional 30-year loan is 6.8230 percent interest with no points and no other closing costs.
a. What is the amount of the monthly payment? Calculate this using both Excel® and one of the Web-based calculators.
b. If, immediately after the sixtieth payment (5 years), the graduate is asked to move, what will be the unpaid balance on the loan?
c. Use Excel®’s EFFECT function (or RATE function) to determine the effective annual interest rate for the loan.
d. Determine the APR using both Excel® and one of the Web-based calculators.
Step by Step Answer:
Principles Of Engineering Economic Analysis
ISBN: 9781118163832
6th Edition
Authors: John A. White, Kenneth E. Case, David B. Pratt