Respuesta :
Answer:
a) $1,133,119.65.
b) $288,000
c) $845,119.65
Step-by-step explanation:
Future value with annuity:
The future value formula, for an annuity, is:
[tex]FV = \frac{P((1+r)^{n} - 1)}{r}[/tex]
An annuity means that a number of payments happen during the period.
P is the value of the deposit, r is the interest rate(per year), as a decimal, and n is the number of deposits.
800 per month:
So [tex]P = 800[/tex].
Each month, for 30 yeas:
This means that [tex]n = 12*30 = 360[/tex]
7% interest
Yearly, however, we pay the amount monthly. So [tex]r = \frac{0.07}{12}[/tex]
a) How big of a loan can you afford?
This is FV.
[tex]FV = \frac{800((1+ \frac{0.07}{12})^{360} - 1)}{\frac{0.07}{12}} = 1113119.65[/tex]
You can afford a loan of $1,133,119.65.
b) How much total money will you pay the loan company?
$800 for 360 months. So
$800*360 = $288,000
You will pay the loan company $288,000
c) How much of that money is interest?
The rest of the $1,133,119.65.
$1,133,119.65 - $288,000 = $845,119.65
$845,119.65 of that money is interest.
