1. Jan sold her house on December 31 and took a $15,000 mortgage as part of the payment. The 10-year mortgage has a 11% nominal interest rate, but it calls for semiannual payments beginning next June 30. Next year Jan must report on Schedule B of her IRS Form 1040 the amount of interest that was included in the two payments she received during the year.
a. What is the dollar amount of each payment Jan receives? Round your answer to the nearest cent. $
b. How much interest was included in the first payment? Round your answer to the nearest cent. $
c. How much repayment of principal was included? Round your answer to the nearest cent. $
e. How much interest must Jan report on Schedule B for the first year? Round your answer to the nearest cent. $
2. You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is $350. The loan will have a 11% APR based on end-of-month payments.
What is the most expensive car you can afford if you finance it for 48 months? Do not round intermediate calculations. Round your answer to the nearest cent. $
What is the most expensive car you can afford if you finance it for 60 months? Do not round intermediate calculations. Round your answer to the nearest cent. $