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anonymous

  • 5 years ago

You have just grduated from college and landed youyr first job, you purchase a house cost 250,000 and find a bank interest rate 6% that compounds monthly for 30 years. what is the monthly payment for this loan? what is the unpaid balance at the end of 5 years? what is the unpaid balance at the end of the 10th year? I think I should use the formula A=p(1+I)n but I am not sure please help.

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  1. anonymous
    • 5 years ago
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    Yes yo do use that formula:\[C(t) = Co(1+r)^t\] Where, C(t) is the cost in the future Co is the initial cost r is the rate in decimals not % (6% = 0.06) t is the time period, in this case in years.

  2. anonymous
    • 5 years ago
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    I have A=250.000 (1+.06) 12 A=250.000 (1.06) 12 I don't know the next step

  3. anonymous
    • 5 years ago
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    mathmind can yo help me when you're done

  4. anonymous
    • 5 years ago
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    why did you put 12 as your t? @btm2011, yes i'll try

  5. anonymous
    • 5 years ago
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    I don't know should I put 30 cause thats the years

  6. anonymous
    • 5 years ago
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    hmm not quite. Here we are making a formula of the Cost over the period of time t so,\[C(t)=250,000(1+.06)^t\]\[C(t) = 250,000(1.06)^t\] this is the formula to find the cost at any time t (which is measure in years in this problem). If we want to know the unpaid balance at the end of 5 years, what do we do?

  7. anonymous
    • 5 years ago
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    ummm take 250,000 (1.06) 5 i divide then multiply

  8. anonymous
    • 5 years ago
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    what are you dividing ?

  9. anonymous
    • 5 years ago
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    250,000 with (1.06)

  10. anonymous
    • 5 years ago
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    that's a multiplication, isn't it?

  11. anonymous
    • 5 years ago
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    ok so 250,000 (1.06) I got 265 then I divide that by 5

  12. anonymous
    • 5 years ago
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    nope, do you know what a exponent is ? some number to the Nth power?

  13. anonymous
    • 5 years ago
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    no

  14. anonymous
    • 5 years ago
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    is that the 30 years

  15. anonymous
    • 5 years ago
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    oh heck no. that is not the formula at all for paying off a loan. that is the formula for interest.

  16. anonymous
    • 5 years ago
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    if i can figure out how to send an attachment i will send the correct formula.

  17. anonymous
    • 5 years ago
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    last formula is the one you use for loan payments.

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  18. anonymous
    • 5 years ago
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    No, an exponent or power tells you how many times a number is multiplies by itself:\[2^2 = 2*2 = 4\]\[2^3 = 2*2*2 = 8\]\[2^4 = 2*2*2*2 = 16\] and so on.. so, what we have is:\[C(t)=250,000(1.06)^t\]in 5 years:\[C(5 years)=250,000(1.06)^{5years}\]\[C(5)= 250,000(1.06*1.06*1.06*1.06*1.06) = 334,556.39\]Hence, the unpaind balance would be: 334,556.39 - 25000 = 84556.4

  19. anonymous
    • 5 years ago
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    that's not it ? which one is it then?

  20. anonymous
    • 5 years ago
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    I got 8.833

  21. anonymous
    • 5 years ago
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    this is just not right. You are answering the following question: "if you invest $250,000 at 6% compounded monthly, how much will you have in 30 years" this question says something different. "What are your monthly payments?"

  22. anonymous
    • 5 years ago
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    @ Satellite73 yes and it then ask for the unpaid balance after 5 years and 10 years

  23. anonymous
    • 5 years ago
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    \[PMT=\frac{250000\times \frac{.06}{12}}{(1-(1+\frac{.06}{12})^{-12\times 30}}\]

  24. anonymous
    • 5 years ago
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    i got $1498.88 rounded. i can try again, but this sounds about right.

  25. anonymous
    • 5 years ago
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    sio take 250000 multiply by .06 then divide by 12

  26. anonymous
    • 5 years ago
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    as you can see the formula is a bit complicated so you have to be careful when entering it into a calculator. lots of room for mistake.

  27. anonymous
    • 5 years ago
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    mathmind, can you please help me

  28. anonymous
    • 5 years ago
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    do I divide .06 with 12 first then multiply the answer by 250000

  29. anonymous
    • 5 years ago
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    that is your numerator. order does not matter. multiply by 250000 by .06 then divide by 12 or divide .06 by 12 then multiply by 250000 get the same thing

  30. anonymous
    • 5 years ago
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    the denominator is much trickier. if you have a good calculator put it all in at once. be careful with parenthese

  31. anonymous
    • 5 years ago
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    I don't have one with me

  32. anonymous
    • 5 years ago
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    then you certainly cannot do this. you cannot compute these things by hand.

  33. anonymous
    • 5 years ago
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    I have a regular one not one that you are aking if I have

  34. anonymous
    • 5 years ago
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    what kind?

  35. anonymous
    • 5 years ago
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    just a regular made in china hybrid power one

  36. anonymous
    • 5 years ago
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    then you have to use lots of parentheses.

  37. anonymous
    • 5 years ago
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    ok I am tryn but just can't get this

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