Question
In: Finance
A loan is being amortized over n-years with monthly payments of $295.32. The rate of interest...
A loan is being amortized over n-years with monthly payments of $295.32. The rate of interest on the loan is j12=12%. The principal repaid in the 25th payment is $206.41.What is the size of the loan?
Solutions
Expert Solution
Interest paid in 25th payment = 295.32 - 206.41 = $88.91
Loan balance at the end of 24th payment = 88.91/(0.12/12)
Loan Balance = $8,891.00
Calculating initial loan amount,
Using TVM Calculation,
PV = [FV = 8,891, PMT = 295.32, N = 24, I = 0.12/12]
PV = $13,275.85
Loan Amount = $13,275.85
jeff jeffy answered 2 years agoRelated Solutions
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