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A loan is amortized over 5 years, with monthly payments at a nominal rate of 8
A loan is amortized over 5 years, with monthly payments at a nominal rate of 8.3% compounded monthly. The first payment is $1000, paid one month from the date of the loan. Each succeeding monthly payment will be 2% lower than the prior one. What is the outstanding balance immediately after the 30th payment is made? 11278.65 Answer correct to 2 decimals. Just Save Submit Problem #1 for Grading
Expert Solution
LOAN AMOUNT $29841.47
BALANCE AFTER 30TH PAYMENT IS $11276.14
LOAN AMOUNT CALUTATION FORMULA
| LOAN AMOUNT=1000/(1+9.5%/12)*(1-(0.97/(1+9.5%/12))^84)/(1-(0.97/(1+9.5%/12)))=29841.47 |
BALANCE AFTER 30TH PAYMENT
| BALANCE AFTER 30TH PAYMENT=29841.47*(1+8.3%/12)^30-1000/(1+8.3%/12)*(1-(0.98/(1+8.3%/12))^30)/(1-(0.98/(1+8.3%/12)))*(1+8.3%/12)^30=11276.14 |
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