Template:Loan Calculator Exercise

From Planipedia

 

Solve for the following problem:

You have just borrowed {{{Currency}}}{{{Amount of Loan1}}} from the Local Bank at 15% per annum (p.a.) and will repay the loan in monthly installments over a 6-month period. Payments will cover interest due and repayment of principal. Determine the monthly installments of the loan, assuming monthly compounding.

Solve for the following problem:

You would like to buy a new car but cannot afford to make a monthly payment of more than {{{Currency}}}{{{Monthly Payment1}}} per month, in order to maintain your current lifestyle. Payments will cover principal and interest owed. Your bank offered to grant you a loan of {{{Currency}}}{{{Amount of Loan2}}} at a rate of 10% interest, compounded monthly. If you decided to take this offer, at a monthly payment of {{{Currency}}}{{{Monthly Payment1}}}, how many months would it take you to pay off your loan?

Solve for the following problem:

This is the third anniversary of the first five year term of a {{{Currency}}}{{{Mortgage1}}} mortgage, with a rate of 10.25% compounded semiannually over a 20 year amortization period. Payments are made monthly.

• What is the balance of the mortgage after the three years (today)?
• What will be the balance at the end of the five (5) year term?

The clients have decided to take advantage of increasing their payments on their mortgage loan by 10% each year starting at the first anniversary in order to save substantial funds. What affect will this have on:

• The balance of the mortgage after three years (today)?
• The balance at the end of the five (5) year term?

TIP: After entering the anniversary lump sum into the appropriate field and recalculating you will notice the Amortization has decreased.