Posted by **HELP** on Sunday, August 26, 2007 at 7:08pm.

After 12 months of making extra payments, what will be the loan balance? After 12 months of making the regular

payment and investing the $50, what will be the loan balance?

Under the regular payment and investing option, excluding the tax due on the interest earned, what is the investment balance after 12 months? Compare the scenarios of investment versus prepayment by examining the 60th payment, which occurs at the end of the fifth year. What is the difference between the (a) interest portion of that payment, (b) tax deduction for interest, and (c) principal balance? Finally, how much is in the investment account? (a) How long does it take to repay the entire loan under the prepayment option? (b) What is the total interest paid over the life of the loan? Compare the total interest paid under each scenario? How much less in interest do you pay under the prepayment option?

Loan Balance: $135000

Current Payment: $990.62

Additional Payment: $50.00

Loan Interest Rate: 8.0%

Loan Interest Deductibility: YES

Investment Rate Return: 6.00%*

Tax Bracket: 30.00%

Investment Type: After-Tax

## Answer This Question

## Related Questions

- math - fixed installment loan of $13,500 with 60 months to pay back, monthly ...
- math - 1. Shawn Fitzgerald finds a suitable property and agrees upon a selling ...
- Math questions - 1. Shawn Fitzgerald finds a suitable property and agrees upon a...
- math - Tim Newman took out a simple interest loan of $1500 at a 10 percent ...
- Math--Please help!! - Tim Newman took out a simple interest loan of $1500 at a ...
- Math Question - Tom Newman took out a simple interest loan of $1,500.00 at 10 ...
- Math - When Teresa opened her law office, she bought 14000 worth of books and ...
- Finance - Could someone tell me how to calculate this in excel? You are ...
- Math - 1. Rishi ram obtained an installment loan for $3,000.00. He agreed to ...
- math - A farmer buys a new tractor for $38,000. He makes a down payment of $10,...

More Related Questions