FIN 419 ASSIST Perfect Education/fin419assist.cofi FIN 419 ASSIST Perfect Education/fin419assist.cofi | Page 26

$18,000. A-Dec will finance the equipment purchase at 7.5% over a
six-year period. What will Hinds have to pay in annual payments for
this equipment?
Chapter 5: Problem 7
7. Future value with periodic rates. Matt Johnson delivers
newspapers and is putting away $15.00 every month from his paper
route collections. Matt is eight years old and will use the money
when he goes to college in ten years. What will be the value of Matt’s
account in ten years with his monthly payments if he is earning 6%
(APR), 8% (APR), or 12% (APR)?
Chapter 5: Advanced Problem 1a & 1b
1. Monthly amortization schedule. Sherry and Sam want to
purchase a condo at the coast. They will spend $650,000 on the
condo and are taking out a loan for the whole amount for the condo
for twenty years at 7.0% interest.
a. What is the monthly payment on the mortgage? Construct the
amortization of the loan for the twenty years in a spreadsheet to
show the interest cost, the principal reduction, and the ending
balance each month.
b. Then change the amortization to reflect that after ten years,
Sherry and Sam will increase their monthly payment to $7,500 per
month. When will they fully repay the mortgage with this increased