Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Discover offers a home equity line of credit that lowers the total of the monthly payments on several hypothetical loans by $367.32. (See the

image text in transcribed

Discover offers a home equity line of credit that lowers the total of the monthly payments on several hypothetical loans by $367.32. (See the following table.) The home equity loan payment is based on "10.43% APR annualized over a 10-year term." This means that the loan is amortized at 10.43% with monthly payments. Table 1t Current Monthly Payment Example Discover Home Equity Loan Type Loan Amount Monthly Payment Loan Amount Monthly Payment Bank cards $10,000 $186.00 PAID OFF NONE Auto loan $12,500 $320.03 PAID OFF NONE Department $2,500 $78.58 PAID OFF NONE store cards Discover home equity line of $25,000 $217.29 credit Total $25,000 $584.61 $25,000 $217.29 Question 1 Using this interest rate and monthly payments for the 10 years, how much money will still be owed at the end of the 10 years? (Round to the nearest cent.) $ Question 2 How much is paid during the 10 years? (Round to the nearest cent.) Amount paid toward the loan = $ Question 3 How much would the payment have to be for the debt to be paid in the 10 years? (Round to the nearest cent.) == Monthly payment $ Question 4 How many months would it take to pay off the debts under the original plan if interest were 15% on each loan? (Recall that each of the original loans had an individual monthly payment. Round your answ up to the nearest whole number.) months = 10

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management Principles and Applications

Authors: Sheridan Titman, Arthur Keown, John Martin

12th edition

133423824, 978-0133423822

More Books

Students also viewed these Finance questions