Question: What difference does 0.5% make on a loan? To answer this question, find (to the nearest dollar) the monthly payment and total interest paid over

What difference does 0.5% make on a loan? To answer this question, find (to the nearest dollar) the monthly payment and total interest paid over the life of the loan for each of the following.

(a) An auto loan of $15,000 at 8.0% versus 8.5%, compounded monthly, for 4 years.

(b) A mortgage loan of $80,000 at 6.75% versus 7.25%, compounded monthly, for 30 years.

(c) In each of these 0.5% differences, what seems to have the greatest effect on the borrower: amount borrowed, interest rate, or duration of the loan? Explain.

Step by Step Solution

★★★★★

3.49 Rating (162 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a A n 15000 12 4 48 36972 Total interest at 8 48 36619 15000 257712 85 48 3... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1386-M-C-L-A-D(3302).docx

120 KBs Word File

Students Have Also Explored These Related Calculus Questions!

Use the data in MEAP93.RAW to answer this question. (i) Estimate the model math10 = (0 + (1 log (expend) + (2 lnchprg + u, and report the results in the usual form, including the sample size and...

Use the data in APPLE.RAW to answer this question. (i) Define a binary variable as ecobuy = 1 if ecolbs > 0 and ecobuy = 0 if ecolbs = 0. In other words, ecobuy indicates whether, at the prices...

Does the location of your seat in a classroom play a role in attendance or grade? To answer this question, professors randomly assigned 400 students* in a general education physics course to one of...

What difference does 0.5% make on a loan? To explore this question, find (to the nearest dollar) the monthly payment and total interest paid over the life of the loan for each of the following. (a)...

30 year fixed rate Monthly Payment: Total Interest Paid: Yearly Insurance Cost, with company name: Annual Property Taxes: Closing Costs; list each individual item and its cost. Amount/time saved if...

using excell , i need question 16-20 solved the excell sheet that i attached shohld be all that you need Home Insert A Colors Page Layout Formulas Data Review View B . Margins Orientation Size...

beth Loan Interest. Sharon is considering the purchase of a car. After making the down payment, she will finance $20,050.00. Sharon is offered three maturities. On a four-year loan, Sharon will pay...

*All questions are based on the original loan.html source code provided by the instructor. Question 2: Is this client-side JavaScript or server-side JavaScript code? Question 3: How many programmer...

same question. please answer both parts san Interest. Sharon is considering the purchase of a car. Afler making the down payment, she will finance $23,660.00. Sharon is offered three maturities. On a...

Loan Interest. Sharon is considering the purchase of a car. After making the down payment, she will finance $20,300.00. Sharon is offered three maturities. On a four-year loan, Sharon will pay...

The materials handling charge for ABC Corp is $.50 per pound of finished product. What is the materials handling charge for a job that produced 10,000 units at a weight of 6 pounds per unit?

From the following quotations, what, if anything, can you conclude about elasticity of demand? a. "Good weather resulted in record wheat harvests and sent wheat prices tumbling. The result has been...

For each of the following misstatements in property, plant, and equipment accounts, state an internal control that the client can implement to prevent the misstatement from occurring and a...

There are no experiments to test for confirmatory bias in economic behavior. Design one. And then do one to test for the law of small numbers.

Find the 95% confidence limits if a coin is flipped five times and comes up heads every time (Exercise 1). Find the exact confidence limits and check if the value for the earlier problem lies within...

Find the 95% confidence limits if a coin is flipped seven times and comes up heads six out of seven times (Exercise 2). Find the exact confidence limits and check if the value for the earlier problem...

Find the 99% confidence limits if a person wins the lottery the second time he plays (Exercise 3). Find the exact confidence limits and check if the value for the earlier problem lies within them.

There are some excellent free personal finance apps available: Mint.com, GoodBudget, Mvelopes, BillGuard, PocketExpense, HomeBudget, and Expensify. After using Mint.com, you realize you need to pay...

Catalog Sales have been a part of the U.S. economy for many years, and companies have enjoyed increased business. One feature that has made mail-order buying so popular is the ease with which...

Could you please help me answer these questions? Thank you! Show your work and use the table (on slide 20) as needed to say whether the hypothesis was supported or rejected and why. Problem 1: We...