- Budgeting
- Cash Management
- Consumer and Mortgage Loans
- Introduction
- Understand How Consumer Loans Can Keep You from Achieving Your Goals
- Explain the Characteristics and Costs of Consumer Loans
- Explain the Characteristics and Costs of Mortgage Loans
- Understand How to Select the Least Expensive Sources for Consumer Loans and How to Reduce the Costs of Borrowing
- Summary
- Assignments
- Debt and Debt Reduction
- Time Value of Money 1: Present and Future Value
- Time Value of Money 2: Inflation, Real Returns, Annuities, and Amortized Loans
- Insurance 1: Basics
- Insurance 2: Life Insurance
- Insurance 3: Health, Long-term Care, and Disability Insurance
- Insurance 4: Auto, Homeowners, and Liability Insurance
- The Home Decision
- The Auto Decision
- Family 1: Money and Marriage
- Family 2: Teaching Children Financial Responsibility
- Family 3: Financing Children’s Education and Missions
- Investments A: Key Lessons of Investing
- Investments B: Key Lessons of Investing
Case Study #6 Answers
A. Anne’s monthly payments are
Traditional: The amortizing loan payment is:
PV=-300,000, I=6.0%, P/Y=12, N=360, PMT = ?
PMT = $1,798.65
Interest-only: The payment would be $300,000 * 7.0% / 12 = $1,750.00
B. After the ten-year interest-only period, her new payment would be (she would have to amortize the thirty-year loan over twenty years):
PV = -300,000, I=7.0%, P/Y=12, N= 240, PMT = ?
PMT = $2,325.89
C. The new payment is a 33 percent increase over the interest-only period in year ten.
