Question

John borowed 12,000 and agreed to repay the loan in six equal monthly payments plus interest of 1.5% per month on the unpaid balance. What is his total payment for the third month?

Answer 1

strange way to pay back a loan...

The way I read the question, you are paying $2000 per month plus the interest?

month# paym interest balance
1 ---- 2000 -- 180.00 10000.00
2 ---- 2000 -- 150.00 8 000.00
3 ---- 2000 -- 120.00 6 000.00 ---> $2120.00
4 ---- 2000 --- 90.00 4 000.00
5 ---- 2000 --- 60.00 2 000.00
6 ---- 2000 --- 30.00 ----0--

In reality the payment would be $x, such that

12000 = x( 1 - 1.015^-6)/.015
x = $2106.30

# payment interest repaymt balance

1 2106.30 180.00 1926.30 10073.70
2 2106.30 151.11 1955.20 8118.50
3 2106.30 121.78 1984.53 6133.98
4 2106.30 92.012014.29 4119.68
5 2106.30 61.80 2044.51 2075.17
6 2106.30 31.13 2075.17 ---0.00