1. ## Loan Question

Hey everyone, im having a bit of trouble remembering how to do these questions from corporate finance

A 29 year old loan requires weekly payments of 125.43 including interest at 24.50% compounded weekly.

a) What was the original amount of the loan?
b) What is the loan's balance 23.00 years later (just after the schedualed payment)?

I have a texes instruments BAII Plus calculator so im able to use that to do the calculations

So far I have:

PV = Compute
I/Y = 24.50
N = 52*29 = 1508? (compounded weekly)
PMT = 125.43
FV = no clue how to calculate this

2. What are you asking; which keys to hit on your calculator?

3. I think I got it,

A)

PV = Compute
I/Y = 24.50
N = 29
PMT = 125.43
FV = 0
P/Y = 52

therefore PV = $3392 B) PV = 3392 I/Y = 24.50 N = 23 PMT = 123.43 FV = Compute P/Y = 52 therefore future value = 6818 4. Originally Posted by LLZUB PV = Compute I/Y = 24.50 N = 29 PMT = 125.43 FV = 0 P/Y = 52 therefore PV =$3392
NO. Answer is much higher: $26,600 If I lend you$3392, will you pay me back $125.43 per week for 29 years? PV = 3392 I/Y = 24.50 N = 23 PMT = 123.43 FV = Compute P/Y = 52 therefore future value = 6818 NO. Answer is$20,480
Anyhow, you should realise that balance owing reduces gradually....

You're having input problems it looks like; check the manual that came

5. Ooo, ok!

ya i thought that it was too low

so if I change N to:

N=1508 (29*52)

then my PV = 26599.65

6. Correct.