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andriy [413]
3 years ago
11

You have an outstanding student loan with required payments of $500 per month for the next four years. The interest rate on the

loan is 9% APR​ (compounded monthly). Now that you realize your best investment is to prepay your student​ loan, you decide to prepay as much as you can each month. Looking at your​ budget, you can afford to pay an extra $ 175 a month in addition to your required monthly payments of $500​, or $675 in total each month. How long will it take you to pay off the​ loan?
Business
1 answer:
irina [24]3 years ago
5 0

Answer:

<em>n = 33.8108479</em>

Explanation:

We will calculate the current principal

And then calculate the time period it takes with a higher payment of 675 dollars per month:

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C $ 500

time      48 ( 4 years x 12 months per year)

rate 0.0075 (9% annual divide by 12 months)

500 \times \frac{1-(1+0.0075)^{-48} }{0.0075} = PV\\

PV $20,092.3909

Now we recalculate n:

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C  $675.00

time n

rate    0.0075

PV $20,092.3900

675 \times \frac{1-(1+0.0075)^{-n} }{0.0075} = 20092.39\\

<u>from the annuity formula we solve as we can until arrive at this situation:</u>

(1+0.0075)^{-n}= 1-\frac{20092.39\times0.0075}{675}

(1+0.0075)^{-n}= 0.77675122

<u>We use logarithmics properties to solve for n:</u>

-n= \frac{log0.77675122}{log(1+0.0075)}

<em>n = 33.8108479</em>

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The law of increasing opportunity costs Multiple Choice applies to land-intensive commodities but not to labor-intensive or capi
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Answer:

may limit the extent to which a nation specializes in producing of a particular product.

Explanation:

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What financial behaviors will typically lead to a low credit score?
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but as long as you have a good history of paying your credit bills on time, your credit score will be fine

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3 years ago
Read 2 more answers
Baiman, Inc. issues $1,000,000 of zero-coupon bonds that mature in 10 years. Compute the bond issue price assuming that the bond
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Answer:

Zero-cupon bond= $376,889.48

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Giving the following formula:

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3 0
3 years ago
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