A $200,000 loan amortized over 11 years at an interest rate of 10% per year requires payments of $21,215

Answer:

Given that;

Loan over 11 years is $200,000
Interest rate is 10%
Required payment is $21,215.85

Interest per year;

The interest per year can be determined as follows:

Interest per year = Loan amount*Interest rate
= 200,000*0.1
= 20,000

Therefore, the interest per year is $20,000

Payment to principal amount;

The payment to principal amount can be determined as follows:

Payment to principal amount = Required payment— Interest per year
=21,215.85-20,000
=1,215.85

Therefore, the principal amount is $1,215.85

Principal amount repaid in 11 years;

The principal amount repaid in 11 years can be determined as follows:

Principal amount repaid in 11 years=Principal amount*Number of years.
=1,215.85*11
=13,374.35

Therefore, the principal amount repaid in 11 years is $13,374.35

Loan balance after 11 years;

The loan balance after 11 years can be determined as follows:

Loan balance after 11 years = Initial loan amount—Principal repaid in 11 years.
= 200,000-13,374.35
=186,625.65

Therefore, the loan balance after 11 years is
$186,625.65