HACE 3200 1nd Edition Lecture 15Outline of Last Lecture I. Consumer loansII. Acceleration ClauseIII. EquityOutline of Current Lecture II. Practice ProblemsCurrent LectureFriday 2/211) Principal of $137,000. Rate of 12.7%, for a time of 18 months. Using simple interest method, calculate your interest. P = 137,000*R = .127*T = 1.5. Answer = $26,098.50.2) Principal of $123,000. Rate of 14.2%, for a time of 30 months. Using simple interest method,calculate your interest. P = 123,000*R = .142*T = 2.5. Answer = $43,665.3) Principal of $152,000. Rate of 19.7%, for a time of 3 years. Using simple interest method,calculate your interest. P = 152,000*R = .197*T = 3. Answer = $89,832.4) Principal of $135,000. Rate of 12.6%, for a time of 18 months. Using the discount method, calculate your finance charge (interest). (This method is the same I=P*R*T as the simple interest, however in real life you must pay the finance charge up front before receiving the loan). P = 135,000*R = .126*T = 1.5. Answer = $25,515.5) Using the discount method a) calculate the interest (finance charge) on the following loan, and b) state what the balance will be on the borrower’s check, and c) the amount that the borrower will repay at the end of the loan: Principal = $185,000. Rate = 17.9%, Time = 4 years.P = 185,000*R = .179*T = 4. A) Interest = $132,460. B) 185,000 – 132,460 = $52,540. C) 185,000+ 132,460 = $317,460.These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.6) Using the add-on method calculate the monthly payment for the following loan: Principal of $245,000. Rate of 12.8% for a time of 6 years. P = 245,000*R = .128*T = 6. Interest = $188,160; 188,160 + 245,000 = $433,160 / 72 (for monthly payments) = $6,016.11 per month.7) Calculate my debt limit ratio if my total monthly take-home pay and monthly non-mortgage debt payments are as follows:Annual take home pay = $175,000 (calculate monthly) = 175,000 / 12 = 14,583.33Monthly student loan payment = $1850Monthly car payment = $1250Monthly truck payment = $950Annual personal loan payment = $48,000 (calculate monthly) = 48,000 / 12 = 4,000DLR = total monthly nonmortgage debt paymentsTotal monthly take home pay 8,000 / 14,583.33 = .5520 (convert to percentage) = 55.2% is already encumbered by debt.8) Using the add-on method calculate the monthly payment for the following loan: Principal of $170,000. Rate of 17.3% for a time of 6 years. P = 170,000*R = .173*T = 6. Interest = $176,460; 176,460 + 170,000 = 346,460 / 72 (for monthly) = $4,811.94 per month.9) Pay Day Loan of $4500 is being borrowed for 3 weeks. Only a fee of $500 is charged. Calculate your rate of interest. P = 4500*R?*T = .0577 (3 / 52) = 500; 500 = 259.65*R; R (Interest) = 1.9259 (convert to percentage) = 192.59%. These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a
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