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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 ago
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