1. Present Value and Loans Mat 112

2. Now, let’s withdraw

3. Withdraw from a “present value”

4. Paying off a Loan

5. How long does the money last?

6. Quarterly Withdrawals

7. Present Value

8. Another sum of exponentials We use the same “sum of a series” technique, as we used for FV, and arrive at:

9. 2 Versions of the PV formula

10. Examples for Present Value Mat 112

11. Compute PV

12. How much interest?

13. Compute PMT

14. Setup, and compute... PMT = $ 846.09

15. Example:

16. Try Another

17. Car Payments

18. Purchase Price?

19. A Bigger Loan If you plan to buy a house and finance $90,000 with a 30-year loan charging 6.6% compounded monthly, what is the size of your monthly payment? Here n = 12(30) = 360 payments. Over the 30 years, what is the total of your monthly payments?