You take out a loan for 10000. You pay off the loan with monthly payments of...

You take out a loan for 10000. You pay off the loan with monthly payments of 90 for 10

years.

(a) What is the monthly effective rate? What is the annual effective rate?

(b) What is the outstanding loan balance immediately after the 7th payment? Calculate

using both the retrospective and prospective formulas.

(c) Assume you miss the 13th and 53rd payments, what will be the outstanding loan balance after the 71st payment?

actuarial science

Expert Solution

jeff jeffy answered 2 years ago

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