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4-3 LOAN CALCULATIONS AND REGRESSION

4-3 LOAN CALCULATIONS AND REGRESSION. OBJECTIVES. Calculate the present value of a single deposit investment. Calculate the present value of a periodic deposit investment. monthly payment calculator natural logarithm linear regression equation quadratic regression equation

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4-3 LOAN CALCULATIONS AND REGRESSION

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  1. 4-3LOAN CALCULATIONS AND REGRESSION OBJECTIVES Calculatethe present value of a single deposit investment. Calculatethe present value of a periodic deposit investment.

  2. monthly payment calculator natural logarithm linear regression equation quadratic regression equation cubic function cubic regression equation Key Terms

  3. Example 1 Hannah is taking out a 4.3% loan to purchase an $18,000 car. The length of the loan is 8 years. How much will she pay in interest?

  4. Exponential Bases and Natural Logarithms

  5. Loan Length Formula M = monthly payment p = principal r = interest rate t = number of years

  6. Example 2 Claude wants to borrow $25,000 to purchase a car. After looking at his monthly budget, he realizes that all he can afford to pay per month is $300. The bank is offering a 5.9% loan. What would need to be the length of his loan be so that he can stay within his budget?

  7. EXAMPLE 3 This lesson opened with a discussion about a $100,000 loan with an APR of 7.5% taken out in January 2010 for a period of 15 years. Examine the table of decreasing loan balances over the 15-year period. Use regression to determine a curve of best fit for this data.

  8. CHECK YOUR UNDERSTANDING Use the linear, quadratic, and cubic regression equations determined in Example 3 to compare the computed loan balances when x = 2 with the loan balance amount given in the chart for 2011.

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