In: Finance
Annual Payment = $6000
First, we will calculate the Principal Loan amount:-
Where, P= Loan amount
r = Periodic Interest rate = 0.08
n= no of periods =30
Loan Amount = $ 67,546.70
Now, Calculate the no of period that will make the loan balance to be half:-
Where, P= Loan amount = $67,546.70
r = Periodic Interest rate = 0.08
n= no of periods
m = no o time lapsed
Outstanding Balance = $67,546.70/2 = $ 33,773.35
4.53132844455 = 10.0626568891 - (1.08)^m
(1.08)^m = 5.5313284446
Taking log both sides:
m log(1.08) = log(5.5313284446)
m(0.03342376) = 0.74282945
m = 22.22
So, it will take 22.22 years to make balance to half.
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