# 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 = \$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