Math Problem Statement
uppose you want to borrow
$110 comma 000110,000
and you find a bank offering a
2020-year
term for a loan of that amount, with an APR of
1212%.
Complete parts (a) and (b) below.
Question content area bottom
Part 1
(a) What are your monthly payments?
PMTequals=$1,211.191,211.19
(Round to the nearest cent as needed.)
Part 2
(b) Instead of making
1212
payments per year, you save enough money to make a
1313th
payment each year, of the same amount as your regular monthly payment found in part
(a).
How long will it take to pay off the loan?
Yequals=2020
(Type an integer or decimal rounded to one decimal place as needed.)
Solution
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Math Problem Analysis
Mathematical Concepts
Loan Amortization
Compound Interest
Extra Payments
Formulas
Loan payment formula: PMT = [P * r * (1 + r)^n] / [(1 + r)^n - 1]
Number of payments with extra payment: Adjusted using additional payment formula
Theorems
Time value of money
Loan amortization schedule
Suitable Grade Level
Grades 10-12 (or early college-level finance)
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