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The problem - solving videos are intended as a resource to help you understand what each of the problems seeks to accomplish. After viewing, simply
The problemsolving videos are intended as a resource to help you understand what each of
the problems seeks to accomplish. After viewing, simply follow the stepbystep instructions
outlined below to guide you in solving your assignment. Note that although the online
calculators that are used in these assignments may differ from those that were used in the
videos, your stepbystep instructions will take that into account.
Video Your Assignment There are Parts to this problem
Suppose the bank agrees to lend you $ at interest for years. Using this online
calculator, solve for the following:
A The monthly payment amount
B The total amount of interest that youd end up paying over the years.
C The date of the last payment. Let the Mortgage Start Date remain on todays date
at the start.
D The consequences of adding $optional extra payment to each of your monthly
payments. Specifically:
a Does the last payment date change? If so by how many months?
b What would the total amount of interest paid under the loan become?
E What conclusions can you draw from this example?
MD Weiss LLC All rights reserved.
The steps to solving this problem are as follows:
FOR PARTS A B AND C:
a Click on the Loan Amount and enter the calculator will add the dollar
sign and comma
b c d Click on the Loan Term and use the dropdown menu to enter years
Click on the Interest rate and enter
Click the tab button on your keyboard and use the Loan start date that is
automatically selected by the calculator which should be the current date
e The solutions to PARTS A B and C will be automatically displayed
FOR PART D:
a Click on the highlighted Optional: Make extra payments link dropdown below
your input boxes
b Enter in the Additional amount to monthly payment box
c Tab down and you will see the answers to Part D a and b
FOR PART E:
Explain your conclusions
Video Your Assignment There are Parts to this problem. Note that Parts A B and C
require the specific APR that you will have calculated using the calculator and Part D requires
an answer as well
Suppose you needed to borrow $ for five years months You checked online and
realized there are all kinds of alternatives that competing lenders are offering. Some have
lower interest rates but charge upfront fees. Others have higher interest rates but charge
smaller upfront fees, or no fees at all. Using this APR calculator, calculate the Annual
Percentage Rates for each of the following loan offers and decide which you would choose.
Be sure to take into consideration your ability to fund the amount of upfront money, versus
the value of what could be a lower monthly payment for the term of the loan.
A interest rate plus a total of $ in fees
B interest rate plus $ in fees
C interest rate plus $ in fees
MD Weiss LLC All rights reserved.
D Which would you choose and why?
The steps to solving this problem are as follows:
Click on the APR calculator
FOR PART A:
a enter in the Loan Amount box
b Enter in the Extra Cost box
c Enter in the Interest Rate box
d Enter in the No of Months box
e Click on Calculate and the solution to Part A will appear in red on the right
hand side
FOR PARTS B AND C:
Repeat these steps by substituting the interest rate and fee values and press
Calculate Again for the updated APR solutions
Video Your Assignment There are Parts to this problem
Suppose you and your significant other are shopping for furniture. After haggling a bit, the
salesperson is attempting to close the sale with his special offer of $ no money down
and no payments for years. The two of you are pretty tempted, that is until you remember
that there is no such thing as an interestfree loan. After doing a bit of research, youve
determined that your bank would charge interest to lend you the money for this
purchase. So you decide to use this Time Value of Money calculator to use that information to
determine the real cost of your purchase.
The steps to solving this problem are as follows:
FOR PART A:
a b Click on the abovereferenced link
Enter in the Future Value box because thats the amount that will be due
later
MD Weiss LLC All rights reserved.
c Enter in the Annual Rate box because thats what it would cost for the bank
loan
d e Enter in the Periods box because youll have years to pay for your purchase
Click on the dropdown menu for Compounding and select Annually because
we are making the assumption that interest will only be compounded x per year
f Click the PV button, which is the Present Value of todays cash and your
solution to Part A will automatically appear. Note that there will be a minus sign
in front of that number. Thats because the payment of cash means that youre
giving up some of
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