Part I-A

Truck price
Percent down
APR
pmt/year
years

amount down
amount loan
monthly deposit

$ 6,000.00
$ 34,000.00
$
247.61

saving schedule

40,000
15%
1%
12
2

PMT#

$ PMT

$ INT

1 $

247.61 $

2 $

247.61

3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

247.61
247.61
247.61
247.61
247.61
247.61
247.61
247.61
247.61
247.61
247.61
247.61
247.61
247.61
247.61
247.61
247.61
247.61
247.61
247.61
247.61
247.61

$ 5,942.70

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

$BAL
-

247.61

Questions:
1. How much money is deposited?
2. What is the total amount of interest earned?

0.21

495.43

3. What percentage of the amount deposited is the interest

earned? (Write answer to four decimal places.)

0.41
0.62
0.83
1.03
1.24
1.45
1.66
1.86
2.07
2.28
2.49
2.70
2.90
3.11
3.32
3.53
3.74
3.95
4.16
4.37
4.58
4.79

$ 57.30

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

743.46
991.69
1,240.13
1,488.77
1,737.63
1,986.69
2,235.96
2,485.43
2,735.11
2,985.01
3,235.11
3,485.41
3,735.93
3,986.66
4,237.59
4,488.74
4,740.09
4,991.65
5,243.42
5,495.41
5,747.60
6,000.00

4. How does the percent in #3 above compare to the APR?

Explain.

$
$

5,942.70
57.30
0.0096

It is just under the APR. Assuming that each

payment pays for at least the interest and a
little mor, #3 will always be lower than the
APR (the longer you take to pay off the loan,
the closer you get to the APR.

Part I-B
House Price
Percent down
APR
pmt/year
years

amount down
amount loan
monthly deposit

$ 50,000.00
$ 200,000.00
$
1,358.74

saving schedule

PMT#

250,000
20%
1.5%
12
3

$ PMT

$ INT

$BAL

Questions:
1. How much money is deposited?
2. What is the total amount of interest earned?
3. What percent of the amount deposited is the interest earned? (Write
answer to four decimal places.)

1 $

12 $
24 $
36 $

1,358.74

1,358.74
1,358.74
1,358.74

1,358.74

$ 18.80 $ 16,417.46
$ 39.61 $ 33,082.87
$ 60.73 $ 50,000.00

$ 32,609.78 $ 473.09

$
$

32,609.78
473.09
0.0145

4. How does the percent in #3 above compare to the APR? Explain.

It is just under the APR. Assuming

that each payment pays for at least
the interest and a little more, #3 will
always be lower than the APR ( the
longer you take to pay off the loan,
the closer you get to the APR.)

5. How do answers in #4 Part I-A and #4 in Part I-B compare? Explain.

Part I-B is closer to the APR than Part

I-A because it takes longer to pay
down the debt.

Part II-A
Truck price
Percent down
APR
pmt/year
years

amount down
amount loan
monthly deposit

$
$
$

saving schedule

40,000
15%
1%
12
2
6,000.00
34,000.00
247.61
PMT#

monthly payment
$ PMT

1 $

Questions:
1. What is the total amount of
principle paid for the sixty
payments?

34,000.00

2. What is the total amount of

interest paid for the sixty
payments?

1,980.18

3. What is the total amount paid

for the sixty payments?

35,980.18

4. The total interest is what

percent pf the amount of the loan?

Loan Amount
APR
pmt/year
years

17.82

247.61 $

$ INT
-

$BAL
$

247.61

payment schedule

34,000.00
2.25%
12
5

$599.67
PMT#

$PMT
1
12
24
36
48
60

$599.67
$599.67
$599.67
$599.67
$599.67
$599.67

$INT PD
$
$
$
$
$
$

$PRINC PD

63.75
52.59
40.16
27.44
14.43
1.12

$535.92
$547.08
$559.51
$572.23
$585.24
$598.55

$35,980.18 $ 1,980.18
Total Amt PD (Int & Pmt)

$34,000.00

$
$
$
$
$
$
$

$BAL
34,000.00
33,464.08
27,502.23
20,856.74
14,060.17
7,109.10
0.00

$35,980.18

Part II-B
Home Price
Percent down
APR
pmt/year
years

250,000
20%
1%
12
2

amount down
amount loan
monthly deposit

$ 50,000.00
$ 200,000.00
$
2,063.44

saving schedule

PMT#

Loan Amount
APR
pmt/year
years

monthly payment
$ PMT

1 $ 2,063.44 $

$ INT

$BAL
-

payment schedule

$ 2,063.44

1. What is the total amount of principle

paid for the 360 payments?

$ 200,000.00

2. What is the total amount of interest

paid for the 360 payments?

$ 133,443.23

3. What is the total amount paid for the

360 payments?

$ 333,443.23

5. How does the total percent of interest

paid for the truck loan compare to the
total percent of interest paid for the
mortgage?

$926.23
PMT#

$PMT
1
12
60
120
240
360

$926.23
$926.23
$926.23
$926.23
$926.23
$926.23

$333,443.23
Total amt PD(Int & Princ PD)

Questions:

4. The total interest is what percent of the

amount of the loan?

$ 200,000.00
3.75%
12
30

66.72
The interest paid on the truck is significantly lower than the mortgage
because it gets paid off much faster than the mortgage. Also each
payment on the mortgage does not cover the cost of interest, making the
percentage of interest on the loan higher than the APR, where the trucks
rate is slightly lower than the APR.

$INT PD
$
$
$
$
$
$

$PRINC PD

625.00
614.48
564.11
489.56
291.25
2.89

$301.23
$311.75
$362.12
$436.67
$634.98
$923.35

$ 133,443.23

$200,000.00

$
$
$
$
$
$
$

$BAL
200,000.00
199,698.77
196,322.45
180,154.63
156,223.55
92,566.43
-

$ 333,443.23

Part III
Reflect:
How has this project helped you learn and understand about future and present value?
It made me realize that the amount of your payment has a significant impact when getting a loan
paid down. Just because you have a low interest rate doesn't mean you should pay the lowest
payment possible. You need to pay more towards principle than interest.

How do you think the results would change if the parameters number of years and number of
payments per year at the beginning of the project were changed?
Larger payments would decrease the amount of interest you have to pay. The number of
payments help to get the loan paid off faster. The number of years being more then stretches out
the length of the loan and you will pay more interest and take longer to pay off the loan. If you
have less payments then they will be larger payment and the loan will be paid off faster.

How could you use this work to learn more about future value and present value?
I could use these concepts and formulas to figure out how much money to save for my childrens
college education. I could also use it to determine how many years I needed to save a certain
amount of money to reach my retirement goals.

t value?

when getting a loan

uld pay the lowest
nterest.

and number of

The number of
e then stretches out
off the loan. If you
paid off faster.

e?

ve for my childrens
to save a certain

Part III