Rico needs approximately $2,600 to buy a new computer. A two-year unsecured loan through the credit union is available for 11.50 percent interest. The current rate on his revolving home equity line is 8.25 percent, although he is reluctant to use it. Rico is in the 15 percent federal tax bracket and the 5.75 percent state tax bracket. Which loan should he choose? Why? Regardless of the loan chosen, Rico wants to pay off the loan in 24 months. Calculate the monthly payments for him, assuming both loans use the simple interest calculation method.
The after-tax cost of the home equity loan is ?_______
The payment on the credit union loan would be?_____
The payment on the home equity loan would be?____
The savings from the difference in payment over the life of the loan is?_____
The tax savings over the life of the home equity loan is?
The total savings over the life of home equity loan is?_____
Homework: 4-3 MyFinanceLab: Assignment: Module Four Homework Score: 0 of 1 pt 1 of 7 (7 complete) Hw Score: 63.75%, 4.46 of 7 pts Problem P7-1 (similar to) Question Help * Rico needs approximately $2,600 to buy a new computer. A two-year unsecured loan through the credit union is available for 11.50 percent interest. The current rate on his revolving home equity line is 8.25 percent, although he is reluctant to use it. Rico is in the 15 percent federal tax bracket and the 5.75 percent state tax bracket. Which loan should he choose? Why? Regardless of the loan chosen, Rico wants to pay off the loan in 24 months Calculate the monthly payments for him, assuming both loans use the simple interest calculation method. Click on the table icon to view the MILPF table The after-tax cost of the home equity loan is %. (Round to two decimal places.) Data Table Monthly Installment Loan Tables ($1,000 loan with interest payments compounded monthly) 84 12 18 24 30 36 48 60 72 96 4.00% 4.25% 4.50% 4.75% 5.00% 5.25% 5.50% 5.75% 6.00% 6 .25% 6 .50% 6.75% 00 7 .25% 7,50%, 7.75% 8.00% 8.25% 8.50% 8.75% 9.00% 9.25% 9.50% 9.75% 10.00% | 171.56 | 87.92 | 60.06 | 46.14 37.81 32.27 25.36 | 21.25 | 18.53 16.60 | 15.17 10.25% | 171.68 88.03 | 60.17 | 46.26 | 37.93 32.38 25.48 | 21.37 | 18.65 16.73 | 15.31 10.50% | 171.81188.15 | 60.29| 46.38 38.04 32.50 25.60| 21.49| 18.78|16.86| 15.44 10.75% 11.00% 11 .25% 11.50% | 172.30 | 88.62 | 60.75 | 46.84 38.51 32.98 26.09 | 21.99 | 19.29 | 17.39 | 15.98 11.75% | 172.42 88.73| 60.87| 46.96 38.63 33.10 26.21 | 22.12 | 19.42|17.52|16.12 12.00% | 172.55 88.85 | 60.98 | 47.07 38.75 33.21 26.33 | 22.24 | 19.55 | 17.65 | 16.25 12.25% 12.50% 12 .75% 13.00% | 173.04 89.32| 61.45| 47.54 39.22 33.69 26.83| 22.75| 20.07 18.19 | 16.81 13.25% 13.50% 13 .75% 14.00% | 173.54 | 89.79 | 61.92 | 48.01 39.70 34.18 27.33 | 23.27 | 20.61 18.74 | 17.37 168.62 85.15 57.33 43.42 35.08 29.52 22.58 18.42 15.65 13.67 12.19 168.74 85.2657.44 43.54 35.19 29.64 22.69 18.53 15.76 13.78 12.31 168.86 85.38 57.56 43.65 35.31 29.75 22.80 18.64 15.87 13.9012.42 168.9885.49 57.67 43.76 35.42 29.8622.92 18.76 15.99 14.02 12.54 169.11 85.6157.78 43.87 35.53 29.97 23.03 18.87 16.10 14.13 12.66 169.23 85.72 57.89 43.9835.64 30.0 23.14 18.99 16.2214.25 12.78 169.35 85.84 58.01 44.10 35.75 30.20 23.26 19.10 16.34 14.37 12.90 169.47 85.95 58.12 44.21 35.8730.31 23.37 19.22 16.46 14.4913.02 169.6086.07 58.23 44.32 35.98 30.4223,49 19.33 16.57 14.61 13.14 169.72 86.18 58.34 44.43 36.09 30.54 23.60 19.45 16.69 14.73 13.26 169.84 86.30 58.46 44.55 36.20 30.65 23.71 19.57 16.8114.85 13.39 169.96 86.41 58.57 44.6636.32 30.76 23.83 19.6816.9314.97 13.51 170.09 86.53 58.68 44.77 36.43 30.88 23.95 19.80 17.05 15.0913.63 170.2186.64 58.80 44.89 36.55 30.99 24.06 19.92 17.17 15.2213.76 170.3386.76 58.91 45.00 36.66 31.11 24.18 20.04 17.29 15.34 13.88 170.45 86.87 59.03 45.11 36.77 31.22 24.30 20.1617.41 15.46 14.01 170.58 86.99 59.14 45.23 36.89 31.34 24.41 20.28 17.53 15.59 14.14 170.70 87.1059.25 45.34 37.00 31.45 24.53 20.40 17.66 15.7 14.26 170.82 87.22 59.37 45.46 37.12 31.57 24.65 20.52 17.78 15.8414.39 170.9587.34 59.48 45.57 37.23 31.68 24.77 20.64 17.90 15.96 14.52 171.07 87.45 59.60 45.68 37.35 31.80 24.89 20.76 18.03 16.09 14.65 171.19 87.57 59.71 45.8037.46 31.92 25.00 20.8818.15 16.22 14.78 171.32 87.68 59.83 45.9 37.58 32.03 25.12 21.00 18.2716.34 14.91 171.44 87.80 59.94 46.03 37.70 32.15 25.24 21.12 18.40 16.4715.04 171.93 88.27 60.40 46.49 38.16 32.62 25.72 21.6218.91 16.99 15.57 172.05 88.38 60.52 46.61 38.28 32.74 25.8 21.74 19.03 17.1215.71 172.18 88.50 60.63 46.72 38.4032.86 25.97 21.87 19.16 17.2515.84 172.67 88.97 61.10 47.19 38.87 33.33 26.46 22.3719.6817.7916.39 172.80 89.08 61.21 47.31 38.98 33.45 26.58 22.50 19.81 17.9216.53 172.9289.20 61.33 47,42 39.10 33.57 26.70 22.63 19.94 18.06 16.67 173.1789.43 61.56 47.6639.34 33.81 26.95 22.8820.21 18.33 16.95 173.29 89.55 61.68 47.78 39.46 33.94 27.08 23.01 20.34 18.46 17.09 173.4189.67 61.80 47.89 39.58 34.06 27.20 23.14 20.47 18.6017.23 Enter your answer in the answer box and then click Check Answer. Print Done parts remaining
