You purchase a plot of land worth $54,000 to create a community garden. To do so, you secure a 10-year loan, charging 5.22% APR, compounded monthly, and requiring monthly payments of $505. (Assume the value of the land is still $54,000. Round each answer to the nearest dollar.) (a) Assuming that you put some money down, what was your original loan amount (in dollars)? $______ (b)What is the outstanding balance (in dollars) on your loan after making 4 years of payments? $______ (c)How much equity (in dollars) do you have in the garden after 4 years? $_____
You purchase a plot of land worth $54,000 to create a community garden. To do so, you secure a 10-year loan, charging 5.22% APR, compounded monthly, and requiring monthly payments of $505. (Assume the value of the land is still $54,000. Round each answer to the nearest dollar.) (a) Assuming that you put some money down, what was your original loan amount (in dollars)? $______ (b)What is the outstanding balance (in dollars) on your loan after making 4 years of payments? $______ (c)How much equity (in dollars) do you have in the garden after 4 years? $_____
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 15P
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You purchase a plot of land worth $54,000 to create a community garden. To do so, you secure a 10-year loan, charging 5.22% APR, compounded monthly, and requiring monthly payments of $505. (Assume the value of the land is still $54,000. Round each answer to the nearest dollar.)
(a)
Assuming that you put some money down, what was your original loan amount (in dollars)?
$______
(b)What is the outstanding balance (in dollars) on your loan after making 4 years of payments?
$______
(c)How much equity (in dollars) do you have in the garden after 4 years?
$_____
Please answer all subparts.
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