Question

anyone great with ANNUITIES?

Answer 1

The Johnsons have accumulated a nest egg of $30,000 that they intend to use as a down payment toward the purchase of a new house. Because their present gross income has placed them in a relatively high tax bracket, they have decided to invest a minimum of $1200/month in monthly payments (to take advantage of the tax deduction) toward the purchase of their house. However, because of other financial obligations, their monthly payments should not exceed $1500. If local mortgage rates are 8.5%/year compounded monthly for a conventional 30-year mortgage, what is the price range of houses they should consider?

Answer 2

find the least expensive and the most expensive

Answer 3

R = P i / (1 - (1+i)^(-n))
... R = payment , P = loan principal, i = interest rate, n = number of periods

1200 = P (0.085/12) / (1 - (1 + 0.085/12)^(-30*12))
P = $156,064.372

1500 = P (0.085/12) / (1 - (1 + 0.085/12)^(-30*12))
P = $195,080.4609

answer:$156,064.372 to $195,080.4609

Answer 4

I have tried those the first time and it didn't work! I'm going crazyyyyy

Answer 5

opps decimal after 156064 should be .3794

Answer 6

ok i will try

Answer 7

no it wasn't the answer :/

Answer 8

ok so take 0.085/12=0.00708333+1=1.007083333^-360=0.078786702 then 1-0.078786702=0.921213298. Then divide 0.007083333/0.921213298=0.007689135, then take 1200/0.007689135=156064.3705

Answer 9

I keep making the mistakes after the decimal

Answer 10

The only affect a down payment has on a mortgage is that it determines how much you borrow. (Purchase price - down payment = amount of loan.) A mortgage payment is determined only by how much you have to borrow at what interest rate for how long. (Mortgages are always monthly payments unless otherwise stated.) Look at the examples. The amount of any type of loan is the present value and is positive because it is money someone gives to you to use. Periodic loan payment reduces the value of the loan until, at the end, it has no value, that is the future value of the loan is zero. In most cases, you are looking for the monthly payment but here you are working backwards; you know what you want for your monthly payment so how much can you borrow?

Answer 11

thats what my teacher said

Answer 12

do u get it?

Answer 13

no no I dont

Answer 14

hmmm.

Answer 15

the calculations or the word sentences u dont understand?

Answer 16

well I have done the problem in many ways and got the answer you got also,but when I plug it in it shows me its not correct

Answer 17

when u plug into the calculator or plug in to where?