Payout Annuity

Section 2.6: Payout Annuity - Additional Practice 1. You acquire a $15000 unsubsidized student loan at 4.3% interest. You will graduate 4 years later. How much simple interest accumulates while you in still in school for an unsubsidized loan? I=Prt a. b. If you capitalized the loan, what will be the balance when you graduate? C. After you graduate, you will begin making payments on your loan at 6.8% compounded monthly for 10 years. What is the monthly payment for this loan? d. How much interest will be paid for this loan? e. Suppose that you decide not to capitalize the loan. What is the payment for this loan if it is compounded monthly at 6.8% for 10 years? f. How much interest will you pay if the loan is not capitalized? Be careful here. B What is the savings if you choose not capitalized over the capitalized loan? 2. Nick is purchasing a condominium that he plans to rent. He negotiated a price of $85,000 and the bank is requiring a 30% down payment. The balance is financed with a 30-year fixed-rate mortgage at 3.95%. a. Find the required down payment b. Find the amount of the loan. c. Find the monthly payment for the loan. d. Find the total interest paid over 30 years, e. Nick is going to rent his condominium and wants the tenant to pay the mortgage payment. He would also like to add a little more to the payment to cover damages. How much will he have to add to the monthly payment so that he will make $1,500 additional per year from this rental? (He is not earning interest on this money.) What is the total amount he should charge for rent? f. Make an amortization schedule for the first 3 months. APR: % Amount of Loan: $ Number of Monthly Payments: Monthly Payment Amount $ 0.0 345 Previous balance P I= Pr(') ) Interest Payment 17 Pmt - I Principal Payment P Balance of Loan Payment Number Total Payment PME 1 2 3