1. Today in Precalculus Go over homework Need a calculator Notes: Loans & Mortgages (Present Value) Homework

2. Loans and Mortgages An annuity in which we look determine the total amount of payments put into the annuity. PV: what is the current value of all the payments that will be made R: amount of each equal payment i: interest rate (if given APR, divide by number of payments in a year) n: total number of payments

3. Example 1 We can also figure out how much interest she is paying over the life of the loan. Total amount of payments: 336.67 × 48 = $16,160.16 $16,160.16-$14,999.74 = $1,160.42 =$14,999.74

4. Example 2 17,500=54.0339R R=$323.87

5. Example 3 200,000=143.0176R R=$1,398.43 Total amount of Payments: 1398.43 × 360=$503,434.80 Interest Paid: $503,434.8-$200,000=$303,434.80

6. Example 4. 705=1-1.006 -12t.295 = 1.006 -12t log 1.006.295= -12t t =17 years So it will take 17 years to pay off the mortgage.

7. Example 4(cont) 1,221.82×30×12 = $439,855.20 1,532.20×17×12 = $312,568.80 So Barney and Betty save $127,286.40 by increasing their payments from $1,221.82 to $1,532.20 per month.

8. Homework Pg 341: 17-20, 51-55 Chapter 3 test: Wednesday, January 22