Use The Monthly Payment For A $$ 1 , 000 1,000 1 , 000 $ Loan Table In Figure 10.1 On Page 377 To Solve Problems 3-6. Complete The Table Below: [ \begin{tabular}{|c|c|c|c|c|c|} \hline \textbf{Mortgage} & \textbf{Years} & \textbf{Rate} &
Introduction
In this article, we will be using the monthly payment for a $1,000 loan table in Figure 10.1 on page 377 to solve problems 3-6. These problems involve calculating the monthly payment, total interest paid, and total amount paid for a loan with a principal amount of $1,000. We will use the formula for monthly payments, which is given by:
M = P[r(1+r)n]/[(1+r)n – 1]
Where:
- M = monthly payment
- P = principal amount
- r = monthly interest rate
- n = number of payments
Problem 3: Calculating the Monthly Payment
Given Information
| Year | Rate | Monthly Payment |
|---|---|---|
| 1 | 0.05 | $_____________ |
| 2 | 0.05 | $_____________ |
| 3 | 0.05 | $_____________ |
| 4 | 0.05 | $_____________ |
| 5 | 0.05 | $_____________ |
Solution
To calculate the monthly payment, we need to use the formula for monthly payments. We are given the principal amount (P) as $1,000, the monthly interest rate (r) as 0.05, and the number of payments (n) as 60 (5 years * 12 months/year).
M = 1000[0.05(1+0.05)60]/[(1+0.05)60 – 1] M ≈ 18.43
Completed Table
| Year | Rate | Monthly Payment |
|---|---|---|
| 1 | 0.05 | $18.43 |
| 2 | 0.05 | $18.43 |
| 3 | 0.05 | $18.43 |
| 4 | 0.05 | $18.43 |
| 5 | 0.05 | $18.43 |
Problem 4: Calculating the Total Interest Paid
Given Information
| Year | Rate | Monthly Payment | Total Interest Paid |
|---|---|---|---|
| 1 | 0.05 | $_____________ | $_____________ |
| 2 | 0.05 | $_____________ | $_____________ |
| 3 | 0.05 | $_____________ | $_____________ |
| 4 | 0.05 | $_____________ | $_____________ |
| 5 | 0.05 | $_____________ | $_____________ |
Solution
To calculate the total interest paid, we need to use the formula for total interest paid, which is given by:
Total Interest Paid = Total Amount Paid – Principal Amount
We can calculate the total amount paid by multiplying the monthly payment by the number of payments.
Total Amount Paid = Monthly Payment * Number of Payments Total Amount Paid = 18.43 * 60 Total Amount Paid ≈ 1105.80
Total Interest Paid = Total Amount Paid – Principal Amount Total Interest Paid ≈ 1105.80 – 1000 Total Interest Paid ≈ 105.80
Completed Table
| Year | Rate | Monthly Payment | Total Interest Paid |
|---|---|---|---|
| 1 | 0.05 | $18.43 | $105.80 |
| 2 | 0.05 | $18.43 | $211.60 |
| 3 | 0.05 | $18.43 | $317.40 |
| 4 | 0.05 | $18.43 | $423.20 |
| 5 | 0.05 | $18.43 | $528.99 |
Problem 5: Calculating the Total Amount Paid
Given Information
| Year | Rate | Monthly Payment | Total Amount Paid |
|---|---|---|---|
| 1 | 0.05 | $_____________ | $_____________ |
| 2 | 0.05 | $_____________ | $_____________ |
| 3 | 0.05 | $_____________ | $_____________ |
| 4 | 0.05 | $_____________ | $_____________ |
| 5 | 0.05 | $_____________ | $_____________ |
Solution
To calculate the total amount paid, we need to multiply the monthly payment by the number of payments.
Total Amount Paid = Monthly Payment * Number of Payments Total Amount Paid = 18.43 * 60 Total Amount Paid ≈ 1105.80
Completed Table
| Year | Rate | Monthly Payment | Total Amount Paid |
|---|---|---|---|
| 1 | 0.05 | $18.43 | $1105.80 |
| 2 | 0.05 | $18.43 | $2211.60 |
| 3 | 0.05 | $18.43 | $3327.40 |
| 4 | 0.05 | $18.43 | $4443.20 |
| 5 | 0.05 | $18.43 | $5558.99 |
Problem 6: Calculating the Total Interest Paid and Total Amount Paid
Given Information
| Year | Rate | Monthly Payment | Total Interest Paid | Total Amount Paid |
|---|---|---|---|---|
| 1 | 0.05 | $_____________ | $_____________ | $_____________ |
| 2 | 0.05 | $_____________ | $_____________ | $_____________ |
| 3 | 0.05 | $_____________ | $_____________ | $_____________ |
| 4 | 0.05 | $_____________ | $_____________ | $_____________ |
| 5 | 0.05 | $_____________ | $_____________ | $_____________ |
Solution
To calculate the total interest paid and total amount paid, we can use the formulas:
Total Interest Paid = Total Amount Paid – Principal Amount Total Amount Paid = Monthly Payment * Number of Payments
We can calculate the total amount paid by multiplying the monthly payment by the number of payments.
Total Amount Paid = 18.43 * 60 Total Amount Paid ≈ 1105.80
Total Interest Paid = Total Amount Paid – Principal Amount Total Interest Paid ≈ 1105.80 – 1000 Total Interest Paid ≈ 105.80
Completed Table
| Year | Rate | Monthly Payment | Total Interest Paid | Total Amount Paid |
|---|---|---|---|---|
| 1 | 0.05 | $18.43 | $105.80 | $1105.80 |
| 2 | 0.05 | $18.43 | $211.60 | $2211.60 |
| 3 | 0.05 | $18.43 | $317.40 | $3327.40 |
| 4 | 0.05 | $18.43 | $423.20 | $4443.20 |
| 5 | 0.05 | $18.43 | $528.99 | $5558.99 |
Conclusion
In this article, we used the monthly payment for a $1,000 loan table in Figure 10.1 on page 377 to solve problems 3-6. We calculated the monthly payment, total interest paid, and total amount paid for a loan with a principal amount of $1,000. We used the formula for monthly payments, which is given by:
M = P[r(1+r)n]/[(1+r)n – 1]
Where:
- M = monthly payment
- P = principal amount
- r = monthly interest rate
- n = number of payments
We also calculated the total interest paid and total amount paid using the formulas:
Total Interest Paid = Total Amount Paid – Principal Amount Total Amount Paid = Monthly Payment * Number of Payments
Q: What is the monthly payment for a $1,000 loan with a 5% interest rate and a 5-year term?
A: To calculate the monthly payment, we can use the formula for monthly payments, which is given by:
M = P[r(1+r)n]/[(1+r)n – 1]
Where:
- M = monthly payment
- P = principal amount
- r = monthly interest rate
- n = number of payments
Plugging in the values, we get:
M = 1000[0.05(1+0.05)60]/[(1+0.05)60 – 1] M ≈ 18.43
Q: How do I calculate the total interest paid for a loan with a principal amount of $1,000 and a 5% interest rate?
A: To calculate the total interest paid, we need to use the formula for total interest paid, which is given by:
Total Interest Paid = Total Amount Paid – Principal Amount
We can calculate the total amount paid by multiplying the monthly payment by the number of payments.
Total Amount Paid = Monthly Payment * Number of Payments Total Amount Paid = 18.43 * 60 Total Amount Paid ≈ 1105.80
Total Interest Paid = Total Amount Paid – Principal Amount Total Interest Paid ≈ 1105.80 – 1000 Total Interest Paid ≈ 105.80
Q: What is the total amount paid for a loan with a principal amount of $1,000 and a 5% interest rate?
A: To calculate the total amount paid, we can multiply the monthly payment by the number of payments.
Total Amount Paid = Monthly Payment * Number of Payments Total Amount Paid = 18.43 * 60 Total Amount Paid ≈ 1105.80
Q: How do I calculate the monthly payment for a loan with a principal amount of $1,000 and a 10% interest rate?
A: To calculate the monthly payment, we can use the formula for monthly payments, which is given by:
M = P[r(1+r)n]/[(1+r)n – 1]
Where:
- M = monthly payment
- P = principal amount
- r = monthly interest rate
- n = number of payments
Plugging in the values, we get:
M = 1000[0.10(1+0.10)60]/[(1+0.10)60 – 1] M ≈ 31.25
Q: What is the total interest paid for a loan with a principal amount of $1,000 and a 10% interest rate?
A: To calculate the total interest paid, we need to use the formula for total interest paid, which is given by:
Total Interest Paid = Total Amount Paid – Principal Amount
We can calculate the total amount paid by multiplying the monthly payment by the number of payments.
Total Amount Paid = Monthly Payment * Number of Payments Total Amount Paid = 31.25 * 60 Total Amount Paid ≈ 1875.00
Total Interest Paid = Total Amount Paid – Principal Amount Total Interest Paid ≈ 1875.00 – 1000 Total Interest Paid ≈ 875.00
Q: How do I calculate the monthly payment for a loan with a principal amount of $1,000 and a 15% interest rate?
A: To calculate the monthly payment, we can use the formula for monthly payments, which is given by:
M = P[r(1+r)n]/[(1+r)n – 1]
Where:
- M = monthly payment
- P = principal amount
- r = monthly interest rate
- n = number of payments
Plugging in the values, we get:
M = 1000[0.15(1+0.15)60]/[(1+0.15)60 – 1] M ≈ 53.13
Q: What is the total interest paid for a loan with a principal amount of $1,000 and a 15% interest rate?
A: To calculate the total interest paid, we need to use the formula for total interest paid, which is given by:
Total Interest Paid = Total Amount Paid – Principal Amount
We can calculate the total amount paid by multiplying the monthly payment by the number of payments.
Total Amount Paid = Monthly Payment * Number of Payments Total Amount Paid = 53.13 * 60 Total Amount Paid ≈ 3187.80
Total Interest Paid = Total Amount Paid – Principal Amount Total Interest Paid ≈ 3187.80 – 1000 Total Interest Paid ≈ 2187.80
Conclusion
In this article, we answered frequently asked questions about the monthly payment for a $1,000 loan table. We provided solutions to various problems, including calculating the monthly payment, total interest paid, and total amount paid for loans with different interest rates. We also provided formulas and examples to help readers understand the concepts.