In: Finance
You have taken out a $700,000 blended payment loan. The interest
rate is 4% and you will repay your loan in 10 equal annual
instalments (each payment is due at the end of the period). Each
equal annual instalment is comprised of both principal and
interest, the proportion of which varies per period. How much is
the balance outstanding at the end of the third year (i.e. how much
principal has not yet been repaid)?
A) $581,061.
B) $517,999.
C) $489,264.
D) $441,089.
E) $258,911.
Calculate the third year balance as follows:
Third year end balance is $517,999.29.
Formulas: