Answer Happy

7. Calculating finance charges using the discount method and APRon a single-payment loan You are taking out a single-payment loan that uses the discount method to compute the finance charges. Computing the finance charges is done A the way they're computed using the simple interest method. Under the discount method, a borrower receives the principal the finance charges. For example, if the principal is $6,000 and the finance charges are $900, the borrower will receive $ The following equation computes the finance charges on your loan: F₁ = F₁ = P vrt In the equation, Fa is the finance charge for the loan. What are the other values? P is the amount of the loan. principal 6시 payback r is the stated rate of interest. monthly It is the term of the loan in annual years months. AU A the same as differently from plus less 6,900 5,100 U 8 |+|-|· |× ×|+|-|·
Jon and Kate Alden are 38 years old and have one son, age 9. Jon is the primary earner, making $140,000 per year. Kate does not currently work. The Aldens have decided to use the needs analysis method to calculate the value of a life insurance policy that would provide for Kate and their son in the event of Jon's death. Jon and Kate estimate that while their son is still living at home, monthly living expenses for Kate and their child will be about $4,000 (in current dollars). After their son leaves for college in 9 years, Kate will need a monthly income of $3,300 until she retires at age 65. The Aldens estimate Kate's living expenses after 65 will only be $2,900 a month. The life expectancy of a woman Kate's age is 87 years, so the Alden family calculates that Kate will spend about 22 years in retirement. Using this information, complete the first portion of the needs analysis worksheet to estimate their total living expenses. Step 1: Financial resources needed after death 1. Annual living expenses and other needs Period 2 Period 3 Period 1 $4,000 a. Monthly living expenses b. Net yearly income S needed (1a x 12) C. Number of years 9 18. 22 in time period Total living needs d. $ per time period $1,910,400 Total living expenses (add Line 1d for each period to check your total): S