1. Find the monthly payment R necessary to pay off a loan of $90,000 at 5% compounded monthly for 30 years. (Round final answer up to the nearest cent.) MATH 110 Sec 8-5 Practice Exercises: Amortization

2. Given the annual interest rate and a line of the amortization schedule for the loan, complete the next line of the schedule assuming monthly payments. (Round answers to the nearest cent.) MATH 110 Sec 8-5 Practice Exercises: Amortization Annual Interest Rate Payment Interest Paid Paid on Principal Balance 8.9%$357.31$42.20$315.11$5372.10

3. Amy has a 10 year mortgage for $92,000 at an annual rate of 5%. Find her monthly payment (using table). Table: Monthly payment on a $1000 loan MATH 110 Sec 8-5 Practice Exercises: Amortization Annual Rate Number of years for the loan 34102030 4%$29.53$22.58$10.12$6.06$4.77 5%$29.97$23.04$10.61$6.60$5.37 6%$30.42$23.49$11.10$7.16$6.00

4. MATH 110 Sec 8-5 Practice Exercises: Amortization Complete the amortization schedule below. (Round answers to the nearest cent.) Amy has a 10 year mortgage for $92,000 at an annual rate of 5%. Find her monthly payment (using table). Remember that Amy has a monthly payment of $976.12. Pmt # Monthly Payment Interest Paid Paid on Principal Balance $92,000 Month 11 Month 22 Month 33

5. MATH 110 Sec 8-5 Practice Exercises: Amortization Complete her new amortization schedule below. (Round answers to the nearest cent.) What if Amy decided to pay an extra $150 a month to pay off her loan [10 year, $92,000 mortgage, 5%]. (Remember that her original monthly was $976.12.) Pmt # Monthly Payment Interest Paid Paid on Principal Balance $92,000 Month 11 Month 22 Month 33

6. MATH 110 Sec 8-5 Practice Exercises: Amortization Franklin’s used car cost $13000. After his down payment of $2000, he financed the rest at 6% for 4 years. If the monthly payment on this loan is $258.39, how much interest will Franklin pay over the term of the loan? (Round final answer to nearest cent.)

7. MATH 110 Sec 8-5 Practice Exercises: Amortization Use the table below for a 20 year adjustable-rate mortgage of $173,000 with a beginning interest rate of 5%, increasing 1% in year two and 2% in year three. What is the initial monthly payment? Annual Rate Number of years for the loan 34102030 4%$29.53$22.58$10.12$6.06$4.77 5%$29.97$23.04$10.61$6.60$5.37 6%$30.42$23.49$11.10$7.16$6.00 8%$31.34$24.41$12.13$8.36$7.34 MONTHLY PAYMENT ON A $1000 LOAN

8. MATH 110 Sec 8-5 Practice Exercises: Amortization Use the table below for a 20 year adjustable-rate mortgage of $173,000 with a beginning interest rate of 5%, increasing 1% in year two and 2% in year three. What is the initial monthly payment? Annual Rate Number of years for the loan 34102030 4%$29.53$22.58$10.12$6.06$4.77 5%$29.97$23.04$10.61$6.60$5.37 6%$30.42$23.49$11.10$7.16$6.00 8%$31.34$24.41$12.13$8.36$7.34 MONTHLY PAYMENT ON A $1000 LOAN Make a rough estimate of the monthly payment for year 3 by recalculating payments on the original amount for 20 years using the new interest rate.

9. MATH 110 Sec 8-5 Practice Exercises: Amortization Neal and Lilly took out a 30 year, $130000 mortgage at a 12% annual rate. After 20 years they refinanced the unpaid balance of $92,705 at a 10% annual rate. Find the monthly payments on the original loan and on the new loan and then find the total amount saved on interest by refinancing. Annual Rate Number of years for the loan 34102030 6%$30.42$23.49$11.10$7.16$6.00 8%$31.34$24.41$12.13$8.36$7.34 10%$32.27$25.36$13.22$9.65$8.78 12%$33.21$26.33$14.35$11.01$10.29 MONTHLY PAYMENT ON A $1000 LOAN