Question 1

The interest rate on a $250,000 mortgage is 6.5% compounded monthly. Calculate the monthly payment for an amortization period of 15 and 20 years.

Accepted Answer

$2,177.77;

Question 2

A mortgage calls for monthly payments of $887.96 for 25 years. If the loan was for $95,000, calculate the semi-annually compounded nominal rate of interest on the loan.

Accepted Answer

The answer of A mortgage calls for monthly payments of...

Question 3

A home improvement loan is to be repaid by equal monthly payments for six years. The interest rate is 5.4% compounded monthly and the amount borrowed is $33,500. How much interest will be included in the first payment?

Accepted Answer

A)  $181 
B)  $151 
C)  $161 
D)  $137 
E)  $97 
A)  $181 
B)  $151 
C)  $161 
D)  $137 
E)  $97

Question 4

Metro Construction received $60,000 in vendor financing at 6.5% compounded semi-annually for the purchase of a loader. The contract requires semi-annual payments of $7,500 until the debt is paid off. Construct the complete amortization schedule for the debt. How much total interest will be paid over the life of the loan?

Accepted Answer

$10,638.05 (See the

Question 5

The Zhao family purchased a $670,000 home 7 years ago. The mortgage was based on 25-year amortization and the term of the mortgage was for 7 years at 6.3% interest compounded semi-annually. At the start of year 8, the Zhao family have refinanced their mortgage at 6.1% compounded semi-annually, and have decided to increase their payments by 10% of the original payment amount. Determine how much faster the family will be able to pay off the mortgage by increasing payments and lowered interest rates.

Accepted Answer

A)  33 months faster 
B)  35 months faster 
C)  37 months faster 
D)  39 months faster 
E)  41 months faster 
A)  33 months faster 
B)  35 months faster 
C)  37 months faster 
D)  39 months faster 
E)  41 months faster

Question 6

Monthly payments of $484.99 are to be made on a loan of $20,000 at 7.7% compounded quarterly for four years. How much principal is paid off in the 20th payment?

Accepted Answer

Question 7

A home improvement loan is to be repaid by equal monthly payments for six years. The interest rate is 5.4% compounded monthly and the amount borrowed is $33,500. How much interest will the borrower pay over the six years?

Accepted Answer

A)  $5,794 
B)  $3,618 
C)  $5,427 
D)  $9,045 
E)  $7,023 
A)  $5,794 
B)  $3,618 
C)  $5,427 
D)  $9,045 
E)  $7,023

Question 8

A loan of $45,000 at 8% compounded quarterly is to be amortized over four years with equal payments made at the end of every three months. How much interest will be paid over the entire amortization period?

Accepted Answer

A)  $8,028 
B)  $6,062 
C)  $5,013 
D)  $6,692 
E)  $10,800 
A)  $8,028 
B)  $6,062 
C)  $5,013 
D)  $6,692 
E)  $10,800

Question 9

Grace is analyzing her company's purchase of a new $45,000 machinery. The machinery was purchased through financing at 6.7% compounded quarterly. The company makes quarterly payments over 7 years to pay off this loan. Determine the amount of the principal that had been paid off at the end of year 3 through the quarterly payments.

Accepted Answer

A)  $18,762.29 
B)  $16,762.29 
C)  $14,762.29 
D)  $12,762.29 
E)  $10,762.29 
A)  $18,762.29 
B)  $16,762.29 
C)  $14,762.29 
D)  $12,762.29 
E)  $10,762.29

Question 10

A loan of $32,000 at 6% compounded annually is to be repaid by equal payments at the end of every month for three years. How much interest will be included in the first payment?

Accepted Answer

A)  $160 
B)  $192 
C)  $156 
D)  $140 
E)  $123 
A)  $160 
B)  $192 
C)  $156 
D)  $140 
E)  $123

Question 11

A mortgage loan of $100,000 at 6% compounded monthly is amortized by equal monthly payments over 25 years. What is the total amount of interest that would be paid during the first year?

Accepted Answer

A)  $6,168 
B)  $5,000 
C)  $5,952 
D)  $5,902 
E)  $3,776 
A)  $6,168 
B)  $5,000 
C)  $5,952 
D)  $5,902 
E)  $3,776

Question 12

Annual payments of $12,000 are to be made on a $70,000 loan at 17% compounded annually. A smaller, final payment will be made at the end of the amortization period. What will be the size of the final payment?

Accepted Answer

A)  $6,150 
B)  $5,256 
C)  $4,362 
D)  $5,914 
E)  $8,778 
A)  $6,150 
B)  $5,256 
C)  $4,362 
D)  $5,914 
E)  $8,778

Question 13

Equipment valued at $94,000 was purchased and paid for through the dealership's financing option. Repayments were over 5 years with monthly payment of $1,900. Interest on the loan was compounded monthly. Determine the principal portion and interest portion of the 15th loan payment.

Accepted Answer

A)  Principal = $1,406.74; Interest = $493.26 
B)  Principal = $493.26; Interest = $1,406.74 
C)  Principal = $1,400.00; Interest = $500.00 
D)  Principal = $500.00; Interest = $1,400.00 
E)  Principal = $1,206.74; Interest = $693.26 
A)  Principal = $1,406.74; Interest = $493.26 
B)  Principal = $493.26; Interest = $1,406.74 
C)  Principal = $1,400.00; Interest = $500.00 
D)  Principal = $500.00; Interest = $1,400.00 
E)  Principal = $1,206.74; Interest = $693.26

Question 14

A $67,800 loan is to be repaid by equal annual payments for 15 years. The interest rate is 8.3% compounded annually. Determine the balance outstanding after 10 years.

Accepted Answer

A)  $28,137 
B)  $31,955 
C)  $40,334 
D)  $53,404 
E)  $36,954 
A)  $28,137 
B)  $31,955 
C)  $40,334 
D)  $53,404 
E)  $36,954

Question 15

A $100,000 mortgage at 6.9% compounded semi-annually with a 20-year amortization requires monthly payments. The mortgage allows the borrower to increase the regular payment by up to 10% once each year. How much will the amortization period be shortened if payments are increased by 10% after the 12th payment, and by another 10% after Payment 24?

Accepted Answer

5 years an

Question 16

A $100,000 mortgage at 6.75% compounded semi-annually with a 20-year amortization requires monthly payments. The mortgage allows the borrower to miss a payment once each year. How much will the amortization period be lengthened if the borrower misses the ninth payment? (The interest that accrues during the ninth month is converted to principal at the end of the ninth month.)

Accepted Answer

The answer of A $100,000 mortgage at 6.75% compounded semi-annually...

Question 17

A $300,000 mortgage is amortized over 20 years. Calculate the monthly payment for 6.5% compounded monthly, and 8.5% compounded monthly.

Accepted Answer

$2,236.72;

Question 18

A $60,000 loan at 12% compounded semi-annually is to be repaid by monthly payments of $1,000.
-The vendor of a property agrees to take back a $60,000 mortgage at a rate of 8% compounded semi-annually with monthly payments of $500 for a three-year term. Calculate the market value of the mortgage if financial institutions are charging 10% compounded semi-annually on three-year-term mortgages.

Accepted Answer

A)  $41,557.55 
B)  $57,098.85 
C)  $60,000.00 
D)  $53,936.60 
E)  $59,111.11 
A)  $41,557.55 
B)  $57,098.85 
C)  $60,000.00 
D)  $53,936.60 
E)  $59,111.11

Question 19

A mortgage loan of $132,000 at 6% compounded semi-annually is to be amortized over 25 years by equal monthly payments. How much interest will be paid during the first three years?

Accepted Answer

A)  $19,528 
B)  $22,834 
C)  $23,125 
D)  $26,119 
E)  $30,404 
A)  $19,528 
B)  $22,834 
C)  $23,125 
D)  $26,119 
E)  $30,404

Question 20

A $25,000 home improvement (mortgage) loan charges interest at 6.6% compounded monthly for a three-year term. Monthly payments are based on a 10-year amortization and rounded up to the next $10. What will be the principal balance at the end of the first term?

Accepted Answer

The answer of A $25,000 home improvement (mortgage) loan charges...

The interest rate on a $250,000 mortgage is 6.5% compounded monthly. Calculate the monthly payment for an amortization period of 15 and 20 years.

A mortgage calls for monthly payments of $887.96 for 25 years. If the loan was for $95,000, calculate the semi-annually compounded nominal rate of interest on the loan.

A home improvement loan is to be repaid by equal monthly payments for six years. The interest rate is 5.4% compounded monthly and the amount borrowed is $33,500. How much interest will be included in the first payment?

Monthly payments of $484.99 are to be made on a loan of $20,000 at 7.7% compounded quarterly for four years. How much principal is paid off in the 20^th payment?

A home improvement loan is to be repaid by equal monthly payments for six years. The interest rate is 5.4% compounded monthly and the amount borrowed is $33,500. How much interest will the borrower pay over the six years?

A loan of $45,000 at 8% compounded quarterly is to be amortized over four years with equal payments made at the end of every three months. How much interest will be paid over the entire amortization period?

A loan of $32,000 at 6% compounded annually is to be repaid by equal payments at the end of every month for three years. How much interest will be included in the first payment?

A mortgage loan of $100,000 at 6% compounded monthly is amortized by equal monthly payments over 25 years. What is the total amount of interest that would be paid during the first year?

Annual payments of $12,000 are to be made on a $70,000 loan at 17% compounded annually. A smaller, final payment will be made at the end of the amortization period. What will be the size of the final payment?

Equipment valued at $94,000 was purchased and paid for through the dealership's financing option. Repayments were over 5 years with monthly payment of $1,900. Interest on the loan was compounded monthly. Determine the principal portion and interest portion of the 15^th loan payment.

A $67,800 loan is to be repaid by equal annual payments for 15 years. The interest rate is 8.3% compounded annually. Determine the balance outstanding after 10 years.

A $300,000 mortgage is amortized over 20 years. Calculate the monthly payment for 6.5% compounded monthly, and 8.5% compounded monthly.

A mortgage loan of $132,000 at 6% compounded semi-annually is to be amortized over 25 years by equal monthly payments. How much interest will be paid during the first three years?

A $25,000 home improvement (mortgage) loan charges interest at 6.6% compounded monthly for a three-year term. Monthly payments are based on a 10-year amortization and rounded up to the next $10. What will be the principal balance at the end of the first term?

Review and Applications of Basic Mathematics

Review and Applications of Algebra

Ratios and Proportions

Mathematics of Merchandising

Cost-Volume-Profit Analysis

Simple Interest

Applications of Simple Interest

Compound Interest: Future Value and Present Value

Compound Interest: Further Topics and Applications

Annuities: Future Value and Present Value

Annuities: Periodic Payment, Number of Payments, and Interest Rate

Annuities: Special Situations

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Exam 13: Loan Amortization: Mortgages

The interest rate on a $250,000 mortgage is 6.5% compounded monthly. Calculate the monthly payment for an amortization period of 15 and 20 years.

A mortgage calls for monthly payments of $887.96 for 25 years. If the loan was for $95,000, calculate the semi-annually compounded nominal rate of interest on the loan.

A home improvement loan is to be repaid by equal monthly payments for six years. The interest rate is 5.4% compounded monthly and the amount borrowed is $33,500. How much interest will be included in the first payment?

Monthly payments of $484.99 are to be made on a loan of $20,000 at 7.7% compounded quarterly for four years. How much principal is paid off in the 20th payment?

A home improvement loan is to be repaid by equal monthly payments for six years. The interest rate is 5.4% compounded monthly and the amount borrowed is $33,500. How much interest will the borrower pay over the six years?

A loan of $45,000 at 8% compounded quarterly is to be amortized over four years with equal payments made at the end of every three months. How much interest will be paid over the entire amortization period?

A loan of $32,000 at 6% compounded annually is to be repaid by equal payments at the end of every month for three years. How much interest will be included in the first payment?

A mortgage loan of $100,000 at 6% compounded monthly is amortized by equal monthly payments over 25 years. What is the total amount of interest that would be paid during the first year?

Annual payments of $12,000 are to be made on a $70,000 loan at 17% compounded annually. A smaller, final payment will be made at the end of the amortization period. What will be the size of the final payment?

Equipment valued at $94,000 was purchased and paid for through the dealership's financing option. Repayments were over 5 years with monthly payment of $1,900. Interest on the loan was compounded monthly. Determine the principal portion and interest portion of the 15th loan payment.

A $67,800 loan is to be repaid by equal annual payments for 15 years. The interest rate is 8.3% compounded annually. Determine the balance outstanding after 10 years.

A $300,000 mortgage is amortized over 20 years. Calculate the monthly payment for 6.5% compounded monthly, and 8.5% compounded monthly.

A mortgage loan of $132,000 at 6% compounded semi-annually is to be amortized over 25 years by equal monthly payments. How much interest will be paid during the first three years?

A $25,000 home improvement (mortgage) loan charges interest at 6.6% compounded monthly for a three-year term. Monthly payments are based on a 10-year amortization and rounded up to the next $10. What will be the principal balance at the end of the first term?

Review and Applications of Basic Mathematics

Review and Applications of Algebra

Ratios and Proportions

Mathematics of Merchandising

Cost-Volume-Profit Analysis

Simple Interest

Applications of Simple Interest

Compound Interest: Future Value and Present Value

Compound Interest: Further Topics and Applications

Annuities: Future Value and Present Value

Annuities: Periodic Payment, Number of Payments, and Interest Rate

Annuities: Special Situations

Filters

Monthly payments of $484.99 are to be made on a loan of $20,000 at 7.7% compounded quarterly for four years. How much principal is paid off in the 20^th payment?

Equipment valued at $94,000 was purchased and paid for through the dealership's financing option. Repayments were over 5 years with monthly payment of $1,900. Interest on the loan was compounded monthly. Determine the principal portion and interest portion of the 15^th loan payment.