SOLUTION: <strike>Dale buys a big screen TV at a furniture store that offers zero down and no payments for 15 months. Unfortunately, he is unable to make his first payment on the 16th month

Question 1037812: Dale buys a big screen TV at a furniture store that offers zero down and no payments for 15 months. Unfortunately, he is unable to make his first payment on the 16th month, and he is charged interest for all 16 months of financing. The TV originally cost $950.00, and the interest rate is 7.95%/a compounded monthly. Calculate the total amount Dale now owes on his TV.

10. Sylvia buys a small farm (a quarter section of 160 acres) for $225 000.00. She makes a down payment of $25 000.00 and uses a 20-year mortgage to pay the remainder. Because it is farmland, she opted for a yearly payment instead of monthly payments. Sylvia�s payments are $16 931.89 each year.

a. Calculate how much Sylvia will pay for the farm with yearly payments.
Hint: Include the down payment and amount paid over the course of the 20 year mortgage.

b. How much will Sylvia pay in interest during the 20 years?
Hint: Calculate the difference between her total cost and the initial cost of the farm.

11. Suppose Sylvia chooses to pay for her mortgage in monthly payments of $1375.77 instead of yearly payments.

a. How many monthly payments will Sylvia have during 20 years?
Hint: There are 12 months in a year.

b. Calculate how much Sylvia will pay for the farm with monthly payments.
Hint: Include the down payment and amount paid over the course of the 20 year mortgage.

c. How much more is Sylvia paying with yearly payments than with monthly payments?
Hint: Calculate the difference between her total cost with yearly payments and her total cost with monthly payments.

d. Why is there a difference?

Answer by solver91311(24713) (Show Source): You can put this solution on YOUR website!

Just do the arithmetic. You might have more success getting what you want from this site if you read and follow the instructions for posting, especially the instruction that specifies one question per post.

John

My calculator said it, I believe it, that settles it

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