Solution-How much of the second payment applies to the

How much of the second payment applies to the principal

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Reference no: EM133001653

Please answer each of the following questions below:

1) Mr. A borrows $150 million from a bank at an interest rate of 12% pa. The loan and interest rate are repayable in four equal installments starting in one year after the borrowing date. What is the amount that Mr.A has to pay annually?

2) Today you are retiring. You have a total of $411016 in your retirement savings and have the funds invested such that you expect to earn an average of 7.1 percent compounded monthly on this money throughout your retirement years. You want to withdraw $2500 at the beginning of every month, starting today. How long will it be until you run out of money?

3) On June 1, you borrowed $220000 to buy a house. The mortgage rate is 8.25%. The loan is to be repaid in equal monthly payment over 15 years. The first payment is due on July 1.

a) How much of the second payment applies to the principal balance?

b) How much of the second payment applies to interest?

c) How much of the first payment applies to the principal balance?

Reference no: EM133001653

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How much of the second payment applies to the principal

Reference no: EM133001653

Reference no: EM133001653

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