1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Andru [333]
3 years ago
9

A buyer is getting a fully amortized loan for $220,000. The bank will give the buyer the loan for 15 years at 5 1/2% or for 30 y

ears at 6 1/2%. To the nearest dollar, what is the difference between the monthly payments for these two loans?
Business
1 answer:
Vadim26 [7]3 years ago
6 0

Answer:

Difference in monthly payment=$407.0339

Explanation:

<em>Loan Amortization: A loan repayment method structured such that a series of equal periodic installments will be paid for certain number of periods to offset both the loan principal amount and the accrued interest. </em>

The monthly installment is computed as follows:  

Monthly installment= Loan amount/annuity factor

Loan amount; =220,000

Annuity factor = (1 - (1+r)^(-n))/r

r -monthly rate of interest, n- number of months

First option

monthly interest rate = 5.5% =0.458 %, n- 15×12

Annuity factor= (1-(1+0.055)^(-180 )/0.055 =122.38

Monthly repayment = 220,000/122.386 = 1797.58

Second option

r- 6.5%/12 = 0.542  % n = 15×12 = 180

Annuity factor = ( 1- (1+0.00542)^(-360))/0.005 42= 158.21

Monthly installment = 220,000/1390.549  = 1390.54

Difference in monthly payment = 1,797.583 -  1390.54 =  407.0339

Difference in monthly payment=407.0339

You might be interested in
After the formation of a free trade area for its member countries, the United States found that its high-cost furniture producer
Damm [24]

Answer: Trade creation

Explanation:

Trade creation is the increase in economic welfare which occurs when a country joins a free trade area, like the customs union. Trade creation will happen when the ltariff barriers has been reduced which leads to lower prices.

Trade creation leads to lower cost on producers which will lead to a rise in economic welfare and consumer surplus. Trade creation also leads to expansion of trade.

6 0
3 years ago
The systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organiza
Levart [38]

Marketing research is the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company.

Market research is the system of figuring out the viability of a new product or service thru studies performed directly with capability customers. marketplace studies allows a enterprise to find out the target market and get evaluations and other comments from clients approximately their hobby in the product or service.

4 not unusual styles of market research techniques consist of surveys, interviews, recognition of businesses, and purchaser observation.

Interviews are a common form of primary marketplace studies that may be both in-intensity or as easy as asking a question. An instance of an interview in market research is while a enterprise calls a cutting-edge purchaser to invite how they may be enjoying a product they lately purchased.

Learn more about market research here: brainly.com/question/24448358

#SPJ4

8 0
1 year ago
Suppose social security contributions rise by​ $1 billion while social security benefits also rise by​ $1 billion.​ Further, per
Nadya [2.5K]

Answer:

The answer will be A

Explanation:

As the social security contributions and benefits remain the same in proportion, personal and national income will remain the same.

As disposable income is defined as personal income-personal taxes, and the personal income taxes fall by 500 million (included in the contibutions), this would mean that the disposable income increases.

8 0
3 years ago
Zappos.com constantly reminds customers of recently viewed items and informs them when stock is low in an effort to entice the c
nirvana33 [79]

I guess the correct answer is conversion rate.

Zappos.com constantly reminds customers of recently viewed items and informs them when stock is low in effort to entice the customer to make a purchase. Zappos is trying to improve its conversion rate.

4 0
3 years ago
A futures contract on a 30 day Eurodollar time deposit is currently selling at an IMM index of 95.75 percent. The IMM index on a
kolezko [41]

Answer:

Basis risk for the future contract is 0.65%

Explanation:

Basis risk is the difference in spot price and future price of an hedged asset. It is the difference between the price price of an hedged asset and price of the asset serving as the hedge.

Basis risk = Futures price of contract − Spot price of hedged asset

Basis Risk = Future IMM index - Spot IMM index

Basis risk = 95.75% - 95.10%

Basis risk = 0.65%

5 0
3 years ago
Other questions:
  • Flapjack Corporation had 7,953 actual direct labor hours at an actual rate of $12.00 per hour. Original production had been budg
    14·1 answer
  • What is an investment report that is given to potential investors called
    5·1 answer
  • "financing activities" Creative Sound Systems sold investments, land, and its own common stock for $35.0 million, $15.5 million,
    9·1 answer
  • Increased demand for product A increases the demand for resources used to produce product A. What is the best explanation for th
    15·1 answer
  • What does it mean when a skier holds out one hand, thumb up?'?
    14·1 answer
  • The Analytic Hierarchy Process is being employed in a project selection decision. One major criteria, cost, receives a weighting
    7·1 answer
  • Project Management Practice ProblemBragg’s Bakery is building a new automated bakery downtown Sandusky. Here are the activities
    11·1 answer
  • Kray Incorporated, which produces a single product, has provided the following data for its most recent month of operations: Num
    9·1 answer
  • Which calculation is needed to assess the component pieces of the operating section using the direct approach for the amount col
    7·1 answer
  • As the benefit of consuming more of a good falls with each additional unit, the price consumers are willing and able to pay also
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!