29. Time Period of Annuity = 15 years Annuity Payment = $750 Interest Rate = 8% From Year 6 Interest Rate = 11% Present Value of Annuity = P[(1 – (1+r)^-^n)/r] Present Value of Annuity = 750[(1 – (1+0.11)^1^5)/0.11] Present Value of Annuity = $5,393.15 Value of Annuity at Year 0 = 5393.15/(1.08)5 Value of Annuity at Year 0 = $3,670.49 30. Loan Amount after down payment = 0.80(725,000) Loan Amount after down payment = $580,000 Interest Rate = 5.40% Time Period = 30 years Calculating EMI on Loan, Using TVM Calculation, PMT = [PV = 580000, T = 360, FV = 0, I = 0.054/12] PMT = $3256.88 Monthly Payment = $3,256.88 Value of Loan after 8 years, Using TVM Calculation, FV = [PV = 580,000, T = 96, PMT = -3256.88, I = 0.054/12] FV = $502,540.7 So Balloon Payment at the end of Year 8 = $502,540.70

    29.

    Time Period of Annuity = 15 years

    Annuity Reimbursement = $750

    Interest Rate = 8%

    From Year 6

    Interest Rate = 11%

    Present Value of Annuity = P[(1 - (1+r)^-^n)/r]
    Present Value of Annuity = 750[(1 - (1+0.11)^1^5)/0.11]

    Present Value of Annuity = $5,393.15

    Value of Annuity at Year 0 = 5393.15/(1.08)5

    Value of Annuity at Year 0 = $3,670.49

    30.

    Loan Amount behind down reimbursement = 0.80(725,000)

    Loan Amount behind down reimbursement = $580,000

    Interest Rate = 5.40%

    Time Period = 30 years

    Calculating EMI on Loan,

    Using TVM Calculation,

    PMT = [PV = 580000, T = 360, FV = 0, I = 0.054/12]

    PMT = $3256.88

    Monthly Reimbursement = $3,256.88

    Value of Loan behind 8 years,

    Using TVM Calculation,

    FV = [PV = 580,000, T = 96, PMT = -3256.88, I = 0.054/12]

    FV = $502,540.7

    So Balloon Reimbursement at the purpose of Year 8 = $502,540.70