Question

Part b: Calculate payment schedules for the three loans you identified in part a. For each loan, use an online calculator or spreadsheet to calculate the cost of the loan. Then, fill out the following information in the table below: monthly payment based on the term, APR, number of payments required.

Answer 1

To calculate the payment schedules for the loans, you need to use an online calculator or spreadsheet. For the example of a $300,000 loan at 6% interest with monthly payments over 30 years, the monthly payment would be approximately $1,798.65. Making additional payments can help pay off the loan earlier and save on interest.

Step-by-step explanation:

In order to calculate the payment schedules for the loans, you need to use an online calculator or spreadsheet. Let's take the example of the $300,000 loan at 6% interest with monthly payments over 30 years. Using the formula and plugging in the values, the monthly payment would be approximately $1,798.65.

To calculate the time and money saved if the monthly payments were larger by a fraction of 12, we can consider making 13 payments instead of just 12. By doing so, you would be able to pay off the loan earlier and save on interest. You can use the same formula and calculate the new monthly payment amount based on the adjusted loan term.