2 questions about mathematics of finance

apsicnem

New member
Joined
Sep 10, 2015
Messages
1
1)Dave takes out a 28-year mortgage of 200000 dollars for his new house. Dave gets an interest rate of 16.8 percent compounded monthly. He agrees to make equal monthly payments, the first coming in one month. After making the 66th payment, Dave wants to buy a boat, so he wants to refinance his house to reduce his monthly payment by 600 dollars, and to get a better interest rate. In particular, he negotiates a new rate of 8.4 percent compounded monthly, and agrees to make equal monthly payments (each 600 dollars less than his original payments) for as long as necessary, followed by a single smaller payment. How large will Dave's final loan payment be?


2)Allan borrows 2130 dollars from his uncle. Two years later, he borrows another 1270 dollars. If his uncle charges him 7.7 percent interest compounded annually, how much does Allan owe 7 years after the first loan?
 
1)Dave takes out a 28-year mortgage of 200000 dollars for his new house. Dave gets an interest rate of 16.8 percent compounded monthly. He agrees to make equal monthly payments, the first coming in one month. After making the 66th payment, Dave wants to buy a boat, so he wants to refinance his house to reduce his monthly payment by 600 dollars, and to get a better interest rate. In particular, he negotiates a new rate of 8.4 percent compounded monthly, and agrees to make equal monthly payments (each 600 dollars less than his original payments) for as long as necessary, followed by a single smaller payment. How large will Dave's final loan payment be?

2)Allan borrows 2130 dollars from his uncle. Two years later, he borrows another 1270 dollars. If his uncle charges him 7.7 percent interest compounded annually, how much does Allan owe 7 years after the first loan?
What formula(s) or algorithm(s) have they given you for this sort of exercise? How far have you gotten in applying it/them? Where are you stuck? What, specifically, is your question?

Please be complete. Thank you! ;)
 
Top