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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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Answer:

$7.23

Explanation:

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2 years ago
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Answer:

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Explanation:

hope it helps.

have a great day

8 0
2 years ago
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In a 100-percent reserve banking system, if people decided to decrease the amount of currency they held by increasing the amount
MariettaO [177]

Answer:

a M1 would not change.

Explanation:

the checkable deposits are part of M1 as well as the currency and coins. Therefore, a component of M1 decrease (currency) while another of M1 (checkable deposits) increase.

As the banking system works with a 100-percent required reserve there is no multiplier effect from the deposit therefore M1 do not change.

8 0
3 years ago
During negotiations, which of the following should you do? Focus on meeting your needs. Develop a rapport and focus on the obsta
sashaice [31]

Answer:

<u>Set objectives.</u>

Explanation:

For a negotiation to be effective, it is necessary for the negotiator to follow some important steps in the process that will help him acquire skills that will add to the success of the negotiation.

The first step, therefore, is the preparation of the negotiation, which will be the development of the plan and the definition of the negotiation objectives. Defining the objectives is to know and know what and with whom you are negotiating, knowing the other party and what you want, will be essential to achieve a positive result in a negotiation.

5 0
2 years ago
Assume the following information concerning two stocks that make up an index. What is the value-weighted return for the index? (
tatuchka [14]

Answer:

8.54%

Explanation:

Current Index value:

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= [(69 × 35000) + (122 × 32500)] ÷ [(63 × 35000) + (113 × 32500)] × 100

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Return in percent:

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8 0
2 years ago
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