Suppose that you wish to borrow $400,000 today to finance the purchase that you will repay me

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Suppose that you wish to borrow $400,000 today to finance the purchase that you will repay me with equal quarterly payments over 15 years.

1. If the APR is 4.6%, how much will you pay me each quarter?

2. Amortize the first 2 payments. Make a table, and show the calculation of each cell in the table.

3. Suppose that you plan to pay off the loan immediately after payment 40. What is the remaining principal?

4. Calculate the interest to be paid under both the original scheme and with the early payment described in . How much interest would you save by making the early payment?

Related Book For answer-question

Fundamentals Of Corporate Finance

ISBN: 9780135811603

5th Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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Posted Date: Dec 07, 2023 03:48 AM

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Suppose that you wish to borrow $400,000 today to finance the purchase that you will repay me

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To calculate the quarterly payment amount we can use the formula for the equal quarterly payment on an amortizing loan Payment Loan Amount Quarterly I... View the full answer

Fundamentals Of Corporate Finance

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