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
NeX [460]
2 years ago
6

You pay 20% down on a home with a purchase price of $180,000. Your bank will loan the remaining balance at 7% APR. You have an o

ption to make annual payments or monthly payments on the loan. Both options have a 30-year payment schedule. What is the difference between the annuity payment paid under the annual plan and that under the monthly plan?
Business
1 answer:
Mariulka [41]2 years ago
4 0

The difference between the annuity payment paid under the annual plan and that under the monthly plan is $11,496.43.

The Annuity Difference

An annuity is a series of payments made at equal intervals such as monthly, quarterly, or annually.

The annuity payment under each of the two plans in the question can be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PV = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)

For the annual plan, the annuity payment can be calculated using equation (1) as follows:

PV = Present value = Loan from bank = Purchase price * (100% - Percentage of down payment) = $180,000 * (100% - 20%) = $144,000

PA = P = Annuity payment under annual plan = ?

r = APR = 7%, or 0.07

n = number of periods or years = 30

Substitute the values into equation (1) and solve for PA, we have:

$144,000 = PA * ((1 - (1 / (1 + 0.07))^30) / 0.07)

$144,000 = PA * 12.4090411835059

PA = $144,000 / 12.4090411835059

PA = $11,604.44

For the monthly plan, the annuity payment can be calculated using equation (1) as follows:

PV = Present value = Loan from bank = $144,000

PM = Annuity payment under monthly plan = ?

r = APR / 12 = 7% /12 = 0.07 / 12 = 0.00583333333333333

n = number of periods or months = 30 * 12 = 360

Substitute the values into equation (1) and solve for PM, we have:

$144,000 = PM * ((1 - (1 / (1 + 0.00583333333333333))^360) / 0.00583333333333333)

$144,000 = PM * 150.307567947822

PM = $144,000 / 150.307567947822

PM = $958.04

The difference between the annuity payment paid under the annual plan and that under the monthly plan can therefore be calculated as follows:

Difference = PA – PM = $11,604.44 - $958.04 = $11,496.43

Therefore, the difference between the annuity payment paid under the annual plan and that under the monthly plan is $11,496.43.

Learn more here: brainly.com/question/13405769.

You might be interested in
Damian is using CSS along with HTML while creating a website for his company. Which features of CSS will help him create this we
Vika [28.1K]

Damian can make use of CSS to style the elements of HTML documents.

Answer: Option 1.

<u>Explanation:</u>

CSS stands for Cascading style sheets, which is a type of web language, called style sheet language which standardizes the layout throughout a website. Therefore used for describing the look and formatting of a document, from document presentation, including elements such as the layout, colors, and fonts.

The major characteristics of CSS include styling rules which are interpreted by the client browser and applied to various elements in your document. Major characteristics include: A style rule consists of a selector component and a declaration block component.

4 0
3 years ago
GoodBuy sells gift cards redeemable for GoodBuy products either in store or online. During 2018, GoodBuy sold $960,000 of gift c
balu736 [363]

Answer:

$849,000 gift card revenue should GoodBuy recognize in 2018

Explanation:

gift cards revenue of GoodBuy recognized in 2018

=  gift cards redeemed + remaining gift cards

= $810,000 + $39,000

= $849,000

Therefore, $849,000 gift card revenue should GoodBuy recognize in 2018

3 0
3 years ago
Mariott Condominium, located near San Diego, California, plans to renovate its main building. The project will begin April 1, an
Basile [38]

Answer:

7

Explanation:

because

8 0
2 years ago
(ASAP NEED THIS NOW!)
ra1l [238]

Answer:

B. Cable Television

Explanation:

I'm pretty sure its right sorry if its not

8 0
3 years ago
Read 2 more answers
costco, a popular retail chain in north america, recently opened three new stores in sacramento to cater to its customers. this
just olya [345]

The fact that Costco opened three new stores to serve its customers exemplifies the growth strategy.

<h3 /><h3>What is the growth strategy?</h3>

It corresponds to an organizational plan that defines courses of action with the objective of reaching new markets and consumers. Some growth strategies are related to increasing market share, increasing investments and including benefits in the goods offered.

Therefore, a growth strategy when well implemented helps a company to create more value for the consumer, attracting and retaining them, in addition to becoming more competitive and positioned in the market.

Find out more about growth strategy on:

brainly.com/question/14546783

#SPJ1

6 0
1 year ago
Other questions:
  • A company set-up a petty cash fund with $800. The disbursements are as follows:
    14·1 answer
  • Denasia is planning a cruise to the Bahamas and has a budget for new evening wear of $400. The average price for a pair of shoes
    14·1 answer
  • Ted owns a small florist shop. Since his business is booming, his realizes he will soon need one more delivery van. He decides h
    6·1 answer
  • Compared to attending a technical school, completing a four year college degree allows you to
    14·2 answers
  • ________ pricing occurs when a seller states prices or price savings that mislead consumers or are not actually available to con
    10·1 answer
  • In the context of organizational environments, which of the following is true of mechanistic organizations? a. They are characte
    6·1 answer
  • An exclusion of all products from certain countries or companies by a government or group is called a(n):
    13·1 answer
  • Suppose, you have $20,000 in your account. You receive a monthly
    5·1 answer
  • A division of IBM works out of 360 locations in 64 countries, tracking more than 1.5 million assets for both IBM and its clients
    10·1 answer
  • Ricky is not in a consumer equilibrium. Given the prices of goods, Ricky has allocated all his income such that his marginal uti
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!