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    The document contains information about simple and compound interest, ordinary and annuity due calculations, loan amortization schedules showing the breakdown of principal and interest over time, and effective interest rate examples. Various financial formulas are presented for calculating future and present values, interest, principal repayment amounts, and balances over time for simple and compound interest, annuities, and loans amortized over several periods. Sample calculations are shown applying these formulas to example scenarios involving interest rates, principal amounts, periods, and payment amounts.

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    The document contains information about simple and compound interest, ordinary and annuity due calculations, loan amortization schedules showing the breakdown of principal and interest over time, and effective interest rate examples. Various financial formulas are presented for calculating future and present values, interest, principal repayment amounts, and balances over time for simple and compound interest, annuities, and loans amortized over several periods. Sample calculations are shown applying these formulas to example scenarios involving interest rates, principal amounts, periods, and payment amounts.

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    1 views8 pages

    Bms

    Uploaded by

    dorjidelmau
    The document contains information about simple and compound interest, ordinary and annuity due calculations, loan amortization schedules showing the breakdown of principal and interest over time, and effective interest rate examples. Various financial formulas are presented for calculating future and present values, interest, principal repayment amounts, and balances over time for simple and compound interest, annuities, and loans amortized over several periods. Sample calculations are shown applying these formulas to example scenarios involving interest rates, principal amounts, periods, and payment amounts.

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    of 8

    Simple Interest Ordinary Annuity

    P 1200
    r 0.06 a
    t 5 r
    m

    SI 360 FV/A
    A 1560 PV
    PMT
    Rate
    Nper

    Compound Interest
    p 120 Loan Ammortization
    r 0.03
    t 5 PV
    m 20 r
    n
    CA 139.40
    CI 19.40 a

    Principal
    outstanding at
    PMT beginning
    Effective Rate 1 30000
    r 0.03 2 24678.11
    m 6 3 19036.90
    4 13057.22
    Er 0.030377509393765 5 6718.77

    question 2

    PV -5000
    r 0.015
    n 6

    a Nu.877.63

    Principal
    outstanding at
    PMT beginning
    1 5000
    2 4197.37
    3 3382.71
    4 2555.82
    5 1716.53
    6 864.66

    1 5000
    2 4197.37
    3 3382.71
    4 2555.82
    5 1716.53
    6 864.66
    Ordinary Annuity Annuity Due

    -120 a -120
    0.06 r 0.06
    5 m 5

    Nu.676.45 FV/A Nu.717.04


    Nu.505.48 PV Nu.535.81
    (Nu.120.00) PMT (Nu.120.00)
    6% Rate 6%
    5.00000000000032 Nper 5

    Loan Ammortization

    -30000
    0.06
    5

    Nu.7,121.89

    interest Annuity Principal repaid Principal balance


    1800 7121.89 5321.89 24678.11
    1480.69 7121.89 5641.21 19036.90
    1142.21 7121.89 5979.68 13057.22
    783.43 7121.89 6338.46 6718.77
    403.13 7121.89 6718.77 0.00

    interest Annuity Principal repaid Principal balance


    75.00 877.63 802.63 4197.37
    62.96 877.63 814.67 3382.71
    50.74 877.63 826.89 2555.82
    38.34 877.63 839.29 1716.53
    25.75 877.63 851.88 864.66
    12.97 877.63 864.66 0.00

    75 877.63 802.63 4197.37


    62.96 877.63 814.67 3382.71
    50.74 877.63 826.89 2555.82
    38.34 877.63 839.29 1716.53
    25.75 877.63 851.88 864.66
    12.97 877.63 864.66 0.00
    effective rate
    loan ammortization
    r 0.06
    m 4
    Suppose a bank lends you Nu.5000. Find an amortization s
    0.061 charging a nominal rate of

    PV -5000
    n 3
    r 0.01
    a ?
    a 1700.11

    Principal outstanding in
    PMT Interest
    the beginning

    1 5000 50
    2 3349.89 33.50
    3 1683.28 16.83
    100.331672222039

    a -400
    r 0.00625
    n 120

    FV/A 71172.14
    loan ammortization

    00. Find an amortization schedule, if the loan is amortized in 3 months and the bank is
    charging a nominal rate of 12% compounded monthly.

    Annuity Principal repaid Principal Balance

    1700.11 1650.11 3349.89


    1700.11 1666.61 1683.28
    1700.11 1683.28 0.00

    A 131807.95
    a 10000
    n 10

    r 6%
    p 1200 CI CA-P ER
    r 0.06
    n 5 P 120 R
    R 0.03 M
    SI 360 N 5
    A 1560 M 20
    CA 139.40444091
    CI 19.404440913

    P -120 PV -30000
    R 0.06 r 0.06
    N 5 n 5
    PV Nu.505.48
    FV Nu.676.45 a Nu.7,121.89
    PMT (Nu.120.00)

    principal outstanding
    R 6% PMT at the beginning interest
    N 5 1 30000 1800
    2 24678.11 1480.686
    3 19036.90 1142.214
    4 13057.22 783.4335
    5 6718.77 403.126

    PV -5000
    r 0.015
    n 6
    pmt Nu.877.63

    principal
    outstanding at the
    pmt beginning interest
    1 5000 75
    2 4197.37 62.96061
    3 3382.71 50.74063
    4 2555.82 38.33735
    5 1716.53 25.74801
    6 864.66 12.96984
    0.03
    6
    0.0303775094

    annuity principal repaid principal balance


    7121.89 5321.89 Nu.24678.107.99
    7121.89 5641.21 19036.90
    7121.89 5979.68 13057.22
    7121.89 6338.46 6718.77
    7121.89 6718.77 0.00

    annuity principal repaid principal balance


    877.63 802.63 4197.37
    877.63 814.67 3382.71
    877.63 826.89 2555.82
    877.63 839.29 1716.53
    877.63 851.88 864.66
    877.63 864.66 0.00

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