Worked Example 13 A reducing balance loan of $18 000 has been taken out over 5 years at 8% p.a. (adjusted monthly) with monthly repayments of $364.98. a) What is the total interest paid? b) If, instead, the rate was 9% p.a. (adjusted monthly) and the repayments remained the same, what would be: i) the term of the loan Using the Financial Solver Enter the following: (N:) = n (I(%): r (PV:) = P Pmt: = FV: = PpY: = CpY: = ii) the total amount of interest paid? Using the Financial Solver Enter the following: (N:) = n (I(%): r (PV:) = P Pmt: = FV: = PpY: = CpY: = Worked Example 14 Natsuko and took out a loan for home renovations. The loan of $42 000 was due to run for 10 years and attract interest at 7% p.a., debited quarterly on the outstanding balance. Repayments of $1468.83 were made each quarter. After 4 years the rate changed to 8% p.a. (debited quarterly). The repayment value did not change. a) Find the amount outstanding when the rate changed. Using the Financial Solver Enter the following: (N:) = n (I(%): r (PV:) = P Pmt: =
Worked Example 13 A reducing balance loan of $18 000 has been taken out over 5 years at 8% p.a. (adjusted monthly) with monthly repayments of $364.98. a) What is the total interest paid? b) If, instead, the rate was 9% p.a. (adjusted monthly) and the repayments remained the same, what would be: i) the term of the loan Using the Financial Solver Enter the following: n (N:) = r (I(%): P (PV:) = Pmt: = FV: = PpY: = CpY: = ii) the total amount of interest paid? Using the Financial Solver Enter the following: n (N:) = r (I(%): P (PV:) = Pmt: = FV: = PpY: = CpY: = Worked Example 14 Natsuko and took out a loan for home renovations. The loan of $42 000 was due to run for 10 years and attract interest at 7% p.a., debited quarterly on the outstanding balance. Repayments of $1468.83 were made each quarter. After 4 years the rate changed to 8% p.a. (debited quarterly). The repayment value did not change. a) Find the amount outstanding when the rate changed. Using the Financial Solver Enter the following: n (N:) = r (I(%): P (PV:) = Pmt: =
chapter_7_loans_investments_and_asset_values_2016_student_ver_2.0.docx