ross borrowed $20000 in a secured line of credit to finish his basement . the loan had an annual rate of 4.35 % compounded semi annually and he wanted to pay it off in four years . what would his payments be if he paid :
a. monthly
N=
I%=
PV=
PMT=
FV=
P/Y=
C/Y=
b. bi -weekly
N=
I%=
PV=
PMT=
FV=
P/Y=
C/Y=
c.weekly
N=
I%=
PV=
PMT=
FV=
P/Y=
C/Y=
d. design a spreadsheet to calculate the interest he would have paid with each repayment option
monthly repayments:
bi-weekly repayments :
weekly repayments :
e. what formula would you use in the spreadsheet to determine the interest paid par weekly payment ?
You are not asking much, are you??!!.
I will give you the payments as you asked, but the spreadsheet is your task to construct.
4.35% comp. semi-annually =4.31% comp.monthly =4.31109416711%
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, =4.31% comp.bi-weekly =4.30693200082%
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, =4.31% comp. weekly. =4.30514985512%
Ross's monthly payments =$454.37
Ross's bi-weekly payments=$209.51
Ross's weekly payments =$104.71
e) - Take the weekly comp.rate of: 4.30514985512 / 5200 =0.0008279134. This is the nominal weekly interest rate. Multiply this number by $20,000 which will give you the interest of $16.56. Subtract this interest from the weekly payment of $104.71 and you will get: $88.15, which is principal to be subtracted from the loan of $20,000 - $88.15 =$19,911.85 - which is the balance of the loan after the 1st. payment.
Continue this process on the spreadsheet for each payment. Good luck to you.
