you take a car loan worth 10k, for 6 years and make monthly payments. The going annual rate of interest on such loans is 5%. How much interest will you have paid by the end of 2 and half year. (30 payments)

Sorry I don’t know how to make a new post! So here it is. Please help me understand the given solution. Thanks! ----- You have a 15-year bond that pays $500 every 6 months. The face value is $10,000. The required rate of return is 10. What is the bond’s value? Answer: $10,000 Solution: Present value of interest payments at 10%: $500 * 15.3725 = $7,686 Present value of principal payment at 10%: $10,000 * 0.2314 = $2,314 -----

$928.40

getterdone Wrote: ------------------------------------------------------- > $928.40 explaination?

xenakim Wrote: ------------------------------------------------------- > Sorry I don’t know how to make a new post! So > here it is. > Please help me understand the given solution. > Thanks! > > ----- > > You have a 15-year bond that pays $500 every 6 > months. The face value is $10,000. The required > rate of return is 10. What is the bond’s value? > > Answer: $10,000 > > Solution: > Present value of interest payments at 10%: $500 * > 15.3725 = $7,686 > Present value of principal payment at 10%: $10,000 > * 0.2314 = $2,314 > > ----- plug in your calc the 4 variable you know. then compute PV pmt = 500; fv = 10k, i=5, n=30

PV - 10,000 IY 5/12 N 6*12 = 72 CPT Pmt 2nd Amort P1 - 1, P2 - 30 Bal 6193, Prn 3806, Int 1024 Ans Int $1024

sorry revise it to $1104.94 didnt see th half year

Pepp do you have the answer?

> > Bal 6193, Prn 3806, Int 1024 > > Ans Int $1024 What the hell is this? I don’t have any such computation on my calculator. You are not allowed to use this advanced calculator.

It;s on the BA !! Plus professional is that the right answer?

Thanks guys- The answer is $10,000. I’ll do it with my calc.

pepp Wrote: ------------------------------------------------------- > > > > Bal 6193, Prn 3806, Int 1024 > > > > Ans Int $1024 > > What the hell is this? I don’t have any such > computation on my calculator. You are not allowed > to use this advanced calculator. This is the BAII Plus. Do Second Amort (PV Button) and you’ll be given period inputs (P1-P2) which will give you the loan amortization.

KJH can you explain here you got 30 from for P2

1024 is the answer, but i dont get it. how did you guys do it?

The BAII plus professional has an amort schedule, I just dont know how KJH got the payments

.

PV - 10,000 IY - 5/12 N 6*12 = 72 CPT Pmt 2nd Amort P1 - 1, P2 - 30 Bal 6193, Prn 3806, Int 1024 Ans Int $1024 You have to adjust the interest and time for monthly amortization. Hence multiply 6*12 and divide 5/12. Then compute payment. Then go to 2nd amort, etc…

getterdone Wrote: ------------------------------------------------------- > KJH can you explain here you got 30 from for P2 Yes, 30 = 2.5 years in months. (2.5*12) Keep the questions coming, most of the office left but us ops guys need to stay. It’s a bit slow…

I see now, thanks KJH!

KJH Wrote: ------------------------------------------------------- > getterdone Wrote: > -------------------------------------------------- > ----- > > KJH can you explain here you got 30 from for P2 > > > Yes, 30 = 2.5 years in months. (2.5*12) > > Keep the questions coming, most of the office left > but us ops guys need to stay. It’s a bit slow… myself here in office, damn slow… hers another one for you, easy. For a house you’re about to buy, you can obtain a 25-year mortgage for $50,000 at 13.25% annual interest. This requires payments of $573.35 (at the end of each month). Find the amounts that would be applied to interest and to the principal from the first year’s payments