Course - Theory of Interest (Chapter 5: Amortization &Sinking Funds)
This is a Muti-Part Question.
A loan of $50,000 is being paid back with annual payments over20 years. Interest in a nominal 6% annual compounded 6 times peryear. After 10 years the loan is re-financed at 6% compoundedquarterly for 25 years with payments to be made every month.
a) What's the annual payment during the first 10 years?Answer:$4,413.1772
b) What's the loan balance at the time of re-financing? Answer:$32,248.71
c) How much interest was paid during the first 10 years? Answer:$26,380.48
d) What's the monthly payment for the final 25 years? Answer:$207.19
e) How much interest is paid on the loan altogether? Answer:$56,289.60
