Question 6. Cincino is taking out an add-on loan for $300 and will be paid off in 5 years with an annual interest rate of 9% (a) What will be Cincino's monthly payment? (b) What will be the APR using Table 2? (c) Estimate the APR? EXTRA CREDIT Question 7. If Deino deposit $250 per month into an ordinary annuity that pays an annual interest rate of 3.5%. In how many years will the ordinary somity be worth 1 million dollar? Question 8. Deconstructing an Amortization Schedule: Payment Number Monthly Payment Interest Paid Paid on Principal Month 1 1 Month 2 2 Month 3 3 (a) How much was borrowed? 8965.44 $965.14 5965.44 8627.08 8626.00 $338.36 8339.35 8310.34 Balance $215000 $214661.64 8214322.29 $213981.95 S625.10 (b) If the term of the amortized loan was 30 years compounded monthly, what was the annual rate? Formulas P+/ I = Prt AP(1 + rt) A = P(1 + " M A = R - (****) | P(1 + 5) * = *(1 + **) Annual Interest Rate 3 years 4 years 10 years 20 years 30 years 4% $29.53 822.68 $10 12 $6.06 84.77 29.97 23.03 10.61 6.60 5.37 30.42 23.19 11.10 7.16 6.00 8% 31.34 24.41 12.13 8.36 7.34 10% 32 27 25.36 13.22 9.65 8.78 12% 33 21 26.33 14.35 11.01 10.29 6% TABLE 1. Monthly payments on a $1,000 loan Number of Payments 6 12 24 36 48 60 10% 11% 12% 13% 14% 15% 16% $2.91 $3.23 $3.53 $3.83 $4.12 $4.42 $1.72 5.50 6.06 6.62 7.18 7.74 8.31 8.88 10.75 11.86 12.98 14.10 15.23 16.37 17.51 16.16 17.86 19.57 21.30 23.04 24.80 26.57 21.74 24.06 26.40 28.77 31.17 33.59 36.03 27.48 30.45 33.47 36.52 39.6142.74 45.91 TABLE 2. Finance Charge Per $100 (%is APR) Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 TABLE 3 March Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 TABLE4. April Question 6. Cincino is taking out an add-on loan for $300 and will be paid off in 5 years with an annual interest rate of 9% (a) What will be Cincino's monthly payment? (b) What will be the APR using Table 2? (c) Estimate the APR? EXTRA CREDIT Question 7. If Deino deposit $250 per month into an ordinary annuity that pays an annual interest rate of 3.5%. In how many years will the ordinary somity be worth 1 million dollar? Question 8. Deconstructing an Amortization Schedule: Payment Number Monthly Payment Interest Paid Paid on Principal Month 1 1 Month 2 2 Month 3 3 (a) How much was borrowed? 8965.44 $965.14 5965.44 8627.08 8626.00 $338.36 8339.35 8310.34 Balance $215000 $214661.64 8214322.29 $213981.95 S625.10 (b) If the term of the amortized loan was 30 years compounded monthly, what was the annual rate? Formulas P+/ I = Prt AP(1 + rt) A = P(1 + " M A = R - (****) | P(1 + 5) * = *(1 + **) Annual Interest Rate 3 years 4 years 10 years 20 years 30 years 4% $29.53 822.68 $10 12 $6.06 84.77 29.97 23.03 10.61 6.60 5.37 30.42 23.19 11.10 7.16 6.00 8% 31.34 24.41 12.13 8.36 7.34 10% 32 27 25.36 13.22 9.65 8.78 12% 33 21 26.33 14.35 11.01 10.29 6% TABLE 1. Monthly payments on a $1,000 loan Number of Payments 6 12 24 36 48 60 10% 11% 12% 13% 14% 15% 16% $2.91 $3.23 $3.53 $3.83 $4.12 $4.42 $1.72 5.50 6.06 6.62 7.18 7.74 8.31 8.88 10.75 11.86 12.98 14.10 15.23 16.37 17.51 16.16 17.86 19.57 21.30 23.04 24.80 26.57 21.74 24.06 26.40 28.77 31.17 33.59 36.03 27.48 30.45 33.47 36.52 39.6142.74 45.91 TABLE 2. Finance Charge Per $100 (%is APR) Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 TABLE 3 March Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 TABLE4. April