Question 1

Angelina has agreed to purchase her partner's share in the business by making payments of $1720.00 every three months. The agreed transfer value is $19 500.00 and interest is 9.11% compounded annually. If the first payment is due at the date of the agreement, what is the size of the final payment?

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Question 2

A $248 000.00 mortgage amortized by monthly payments over 35 years is renewable after five years. Interest is 8.12% compounded semi-annually.
a) What is the size of the monthly payments?
b) How much interest is paid during the first year?
c) How much of the principal is repaid during the first five-year term?
d) If the mortgage is renewed for a further five-year term at 7.16% compounded semi-annually, what will be the size of the monthly payments?

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Question 3

A $180 000.00 mortgage is to be amortized by making monthly payments for 22.5 years. Interest is 7.2% compounded semi-annually for a four-year term.
a) Compute the size of the monthly payment.
b) Determine the balance at the end of the four-year term.
c) If the mortgage is renewed for a five-year term at 8.66% compounded semi-annually, what is the size of the monthly payment for the renewal term?

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Question 4

John has agreed to purchase his partner's share in real estate by making payments of $5000.00 every three months. The agreed transfer value is $40 000.00 and interest is 10% compounded annually. If the first payment is due at the date of the agreement, what is the size of the final payment?

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Question 5

The owner of the Guelph Inc. borrowed $20 000.00 at 1.2% compounded semi-annually and agreed to repay the loan by making payments of $1000.00 at the end of every three months.
a) How many payments will be needed to repay the loan?
b) How much will be owed at the end of five years?

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Question 6

Lisa saved $750 000.00. If she withdraws $12 000.00 at the beginning of every month and interest is 12% compounded monthly, what is the size of the last withdrawal?

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Question 7

A debt of $43 100.00 is repaid by payments of $3350.00 made at the end of every six months. Interest is 8.4% compounded quarterly.
a) What is the number of payments needed to retire the debt?
b) What is the cost of the debt for the first five years?
c) What is the interest paid in the 11th payment?
d) Construct a partial amortization schedule showing details of the first three payments, the last three payments, and totals.

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Question 8

Catrina receives payments of $1120.00 at the beginning of each month from a pension fund of $79 500.00. Interest earned by the fund is 11.36% compounded monthly.
a) What is the number of payments Catrina will receive?
b) What is the size of the final payment?

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Question 9

A contract valued at $47 500.00 requires payments of $6951.00 every six months. The first payment is due in four years and interest is 6.6% compounded semi-annually.
a) How many payments are required?
b) What is the size of the last payment?
c) How much will be paid in total?
d) How much of what is paid is interest?

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Question 10

Payments of $1000.00 deferred for nine years are received at the end of each month from a fund of $20 000.00 deposited today at 6% compounded monthly. Calculate the size of the final payment.

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Question 11

Tom receives pension payments of $6000.00 at the end of every six months from a retirement fund of $90 000.00. The fund earns 8.00% compounded semi-annually.
a) How many payments will Tom receive?
b) What is the size of the final pension payment?

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Question 12

Karen receives pension payments of $4570.00 at the end of every six months from a retirement fund of $82 000.00. The fund earns 8.06% compounded semi-annually.
a) How many payments will Karen receive?
b) What is the size of the final pension payment?

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Question 13

A $30 000.00 mortgage is amortized by monthly payments over twenty years and is renewable after five years.
a) If the interest rate is 8.5% compounded semi-annually, calculate the outstanding balance at the end of the five-year term.
b) If the mortgage is renewed for a further three-year term at 8% compounded semi-annually, calculate the size of the new monthly payment.
c) Calculate the payout figure at the end of the three-year term.

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Question 14

A factory valued at $100 000.00 is purchased for a down payment of 28% and payments of $4000.00 at the end of every three months. If interest is 9% compounded monthly, calculate the size of the final payment.

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Question 15

A mortgage balance of $137 960.70 is to be repaid over an eleven-year term by equal monthly payments at 8.1% compounded semi-annually. At the request of the mortgagor, the monthly payments were set at $1140.00.
a) How many payments will the mortgagor have to make?
b) What is the size of last payment?
c) Determine the difference between the total actual amount paid and the total amount required to amortize the mortgage by the contractual monthly payments.

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Question 16

Andre has saved $152 000.00. If he withdraws $1750.00 at the beginning of every month and interest is 7.5% compounded monthly, what is the size of the last withdrawal?

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Question 17

Far East Imports Inc. owes $64 000.00 to be repaid by monthly payments of $2475.00. Interest is 6.12% compounded monthly.
a) How many payments will Far East Imports Inc. have to make?
b) How much interest is included in the 15th payment?
c) How much of the principal will be repaid by the 17th payment?
d) Construct a partial amortization schedule showing details of the first three payments, the last three payments, and totals.

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Question 18

A debt of $40 000.00 is repaid in monthly installments of $500.00. If interest is 8.0% compounded quarterly, what is the size of the final payment?

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Question 19

A debt of $41 000.00 is repaid in monthly installments of $660.00. If interest is 8.4% compounded quarterly, what is the size of the final payment?

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Question 20

A debt of $42 500.00 is repaid by payments of $4850.00 made at the end of each year. Interest is 7% compounded semi-annually.
a) How many payments are needed to repay the debt?
b) What is the cost of the debt for the first three years?
c) What is the principal repaid in the 3rd year?
d) Construct an amortization schedule showing details of the first three payments, the last three payments, and totals.

Accepted Answer

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Quiz 14: Amortization of Loans, Residential Mortgages, and Sinking Funds

Angelina has agreed to purchase her partner's share in the business by making payments of $1720.00 every three months. The agreed transfer value is $19 500.00 and interest is 9.11% compounded annually. If the first payment is due at the date of the agreement, what is the size of the final payment?

John has agreed to purchase his partner's share in real estate by making payments of $5000.00 every three months. The agreed transfer value is $40 000.00 and interest is 10% compounded annually. If the first payment is due at the date of the agreement, what is the size of the final payment?

The owner of the Guelph Inc. borrowed $20 000.00 at 1.2% compounded semi-annually and agreed to repay the loan by making payments of $1000.00 at the end of every three months. a) How many payments will be needed to repay the loan? b) How much will be owed at the end of five years?

Lisa saved $750 000.00. If she withdraws $12 000.00 at the beginning of every month and interest is 12% compounded monthly, what is the size of the last withdrawal?

Catrina receives payments of $1120.00 at the beginning of each month from a pension fund of $79 500.00. Interest earned by the fund is 11.36% compounded monthly. a) What is the number of payments Catrina will receive? b) What is the size of the final payment?

Payments of $1000.00 deferred for nine years are received at the end of each month from a fund of $20 000.00 deposited today at 6% compounded monthly. Calculate the size of the final payment.

Tom receives pension payments of $6000.00 at the end of every six months from a retirement fund of $90 000.00. The fund earns 8.00% compounded semi-annually. a) How many payments will Tom receive? b) What is the size of the final pension payment?

Karen receives pension payments of $4570.00 at the end of every six months from a retirement fund of $82 000.00. The fund earns 8.06% compounded semi-annually. a) How many payments will Karen receive? b) What is the size of the final pension payment?

A factory valued at $100 000.00 is purchased for a down payment of 28% and payments of $4000.00 at the end of every three months. If interest is 9% compounded monthly, calculate the size of the final payment.

Andre has saved $152 000.00. If he withdraws $1750.00 at the beginning of every month and interest is 7.5% compounded monthly, what is the size of the last withdrawal?

A debt of $40 000.00 is repaid in monthly installments of $500.00. If interest is 8.0% compounded quarterly, what is the size of the final payment?

A debt of $41 000.00 is repaid in monthly installments of $660.00. If interest is 8.4% compounded quarterly, what is the size of the final payment?