Present and Future Values

MATH1090|Professor Melo

By Milan Sagato

PART I-A
Truck Price
Percent Down
APR
PMT/yr
yrs
Amount
Down
Amount Loan
Monthly
Deposit
Saving
Schedule

$40,000.00
15.00%
1.00%
12
2
$6,000.00
$34,000.00
$247.61
PMT #

$ PMT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24

$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$5,942.70

$ INT
$0.00
$0.21
$0.41
$0.62
$0.83
$1.03
$1.24
$1.45
$1.66
$1.86
$2.07
$2.28
$2.49
$2.70
$2.90
$3.11
$3.32
$3.53
$3.74
$3.95
$4.16
$4.37
$4.58
$4.79
$57.30

$ BAL
$247.61
$495.43
$743.46
$991.69
$1,240.13
$1,488.77
$1,737.63
$1,986.69
$2,235.96
$2,485.43
$2,735.11
$2,985.01
$3,235.11
$3,485.41
$3,735.93
$3,986.66
$4,237.59
$4,488.74
$4,740.09
$4,991.65
$5,243.42
$5,495.41
$5,747.60
$6,000.00

1. How much money is deposited?

$5,942.70

2. What is the total amount of interest is earned?

$57.30
1

Present and Future Values

MATH1090|Professor Melo

3. What percent of the amount deposited is the interest earned?

By Milan Sagato
0.9642%

4. How does the percent in #3 above compare to the APR? Explain. The actual interest
earned is slightly less than the APR %. The payments arent very large and at a
1%, monthly compounded APR, it just hasnt had time to build up the balance in
which it could payout more favorably.

PART I-B
House Price
Percent Down
APR
PMT/yr
yrs
Amount Down
Amount Loan
Monthly
Deposit
Saving
Schedule

$250,000
.00
20.00%
1.50%
12
3
$50,000.
00
$200,000
.00
$1,358.7
4

PMT #

$ PMT

1
12
24
36

$1,358.7
4
$1,358.7
4
$1,358.7
4
$1,358.7
4
$48,914.
68

$ INT

$ BAL

$0.00

$1,358.74

$18.80

$16,417.46

$39.61

$33,082.87

$60.73
$1,085.
32

$50,000.00

1. How much money is deposited?

$48,914.68

2. What is the total amount of interest is earned?

$1,085.32

3. What percent of the amount deposited is the interest earned?

2.2188%

Present and Future Values

MATH1090|Professor Melo

By Milan Sagato
4. How does the percent in #3 above compare to the APR? Explain. The percent of actual
interest earned in this case is higher than the APR % listed. I believe this is more
likely with this scenario because of the larger amount being deposited, the higher
APR %, and additional year of contributions and monthly compounding being
factored in.
5. How do the answers in #4 Part I-A and #4 in Part I-B compare? Explain. I believe the
reasoning given for both answers falls in line with one another. The bigger the
balance and longer period of time to compound, the more favorable the situation
will be for interest earned.

PART II-A
Loan
Amount
APR
PMT/yr
yrs

Monthly PMT
Payment
Schedule

$34,000.00
2.25%
12
5

$599.67
PMT #

$ PMT
1
12
24
36
48
60

$599.67
$599.67
$599.67
$599.67
$599.67
$599.67
$35,980.18

$ INT PD

$PRINC PD

$63.75
$52.59
$40.16
$27.44
$14.43
$1.12

$535.92
$547.08
$559.51
$572.23
$585.24
$598.55

$1,980.18

$ BAL
$34,000.00
$33,464.08
$27,502.23
$20,856.74
$14,060.17
$7,109.10
$0.00

$34,000.00

1. What is the total amount of principle paid for the sixty payments?

$34,000.00

2. What is the total amount of interest paid for the sixty payments?

$1,980.18

3. What is the total amount paid for the sixty payments?

$35,980.18

4. The total interest is what percent of the amount of the loan?

5.8241%

Present and Future Values

MATH1090|Professor Melo

By Milan Sagato

PART II-B
Loan Amount
APR
PMT/yr
yrs

$200,000.
00
3.75%
12
30

Monthly PMT

$926.23

Payment
Schedule

$ PMT

$ INT PD

$PRINC
PD

$926.23

$625.00

$301.23

12

$926.23

$614.48

$311.75

60

$926.23

$564.11

$362.12

120

$926.23

$489.56

$436.67

240
360

$926.23
$926.23

$291.25
$2.89

$634.98
$923.35

$333,443.
23

$133,443.
23

$200,000.
00

PMT #

$ BAL
$200,000.
00
$199,698.
77
$196,322.
45
$180,154.
63
$156,223.
55
$92,566.4
3
($0.00)

1. What is the total amount of principle paid for the 360 payments?

$200,000.00

2. What is the total amount of interest paid for the360 payments?

$133,443.23

3. What is the total amount paid for the 360 payments?

$333,443.23

4. The total interest is what percent of the amount of the loan?

66.72%

5. How does the total percent of interest paid for the truck loan compare to the total
percent of interest paid for the mortgage? The total percentage of interest paid for
the truck loan was far less than that of the percentage of interest paid for the
mortgage. I believe this is due to the larger amount of money for the loan, the
higher APR %, and the longer timeframe which includes more compounding
periods overall
4

MATH1090|Professor Melo

Present and Future Values

By Milan Sagato

PART III: Reflection

How has this project helped you learn and understand about future and present
value? How do you think the results would change if the parameters number of
years and number of payments per year at the beginning of the project were
changed? How could you use this work to learn more about future value and present
value?
This project has provided me with a deeper understanding of how what we are
learning about really does come into play in our everyday lives. I have a car loan and a
mortgage that I am currently paying on and interestingly enough, my APR percentages
Im paying on them are not too far off from the ones we were using in Parts II-A and II-B. I
had a pretty clear understanding of how much I would be paying in the end, but when I
calculated the percentage of interest Id be paying off of whats going towards my
principle specifically on my mortgage, how much Im giving to interest alone blew me
away.
The above mentioned is a huge reflection of how the size of the loan, the size of your
payments, a d the length of time you choose to pay loans off can put a mean dent into
your personal savings. This is a strong real world example of when in our lives future
value and present value are applied, and using Excel was great practice, as there are
many times when creating spreadsheets is necessary in my line of work. These are great
methods to use to understand complicated subjects such as what we had learned during
our Module 6 Mathematics of Finance portion of the course.