Answered

Westonci.ca is your trusted source for accurate answers to all your questions. Join our community and start learning today! Connect with a community of experts ready to help you find accurate solutions to your questions quickly and efficiently. Join our platform to connect with experts ready to provide precise answers to your questions in different areas.

A restaurant manager has the option of a 30-year loan of $417,000 at an annual interest rate of 3.85% or the same interest rate but on a loan for 15 years.
(a)
Calculate the monthly payment for each loan. (Round your answers to the nearest cent.)
30-year $
15-year $
(b)
Calculate the savings in interest by using the 15-year loan. (Round your answer to the nearest cent.)
$
(c)
The term of the 15-year loan is one-half the term of the 30-year loan. Is the monthly payment for the 15-year loan twice that of the 30-year loan?
Yes
No
(d)
Is the interest savings for the 15-year loan more or less than one-half of the interest paid on the 30-year loan?
more
less

Sagot :

anthougo

a) The monthly payment for each loan is as follows:

30-year $1,954.93

15-year $3,053.25

b) The savings in interest by using the 15-year loan is $154,189,20 ($286,774.20 - $132,585).

c) No. the monthly payment for the 15-year loan is not twice that of the 30-year loan as the loan term.

d) The interest savings for the 15-year loan are more than one-half of the interest paid on the 30-year loan.

How are the calculations for periodic payments done?

The calculations for the monthly payments, including interests can be carried out using an online finance calculator, as follows:

30-year Loan:

N (# of periods) = 360 months (12 x 30 years)

I/Y (Interest per year) = 3.85%

PV (Present Value) = $417000

FV (Future Value) = $0

Results:

PMT = $1,954.93

Sum of all periodic payments = $703,774.80 ($1,954.93 x 360)

Total Interest = $286,774.20 ($703,774.80 - $417,000)

15-year Loan:

N (# of periods) = 180 months (12 x 15 years)

I/Y (Interest per year) = 3.85%

PV (Present Value) = $417000

FV (Future Value) = $0

Results:

PMT = $3,053.25

Sum of all periodic payments = $549,585 ($3,053.25 x 180)

Total Interest = $132,585 ($549,585 - $417,000)

Learn more about periodic payments at https://brainly.com/question/13098072

#SPJ1

We hope this was helpful. Please come back whenever you need more information or answers to your queries. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Thank you for choosing Westonci.ca as your information source. We look forward to your next visit.