Question
Susan Borrowed $5000. The term of the loan is 12% compouned monthly for 3 years.
what is the monthly payments?
How much must she pay at the end of of 1 year to pay the balance off?
How much did she save in interest by paying the loan off in one year??
what is the monthly payments?
How much must she pay at the end of of 1 year to pay the balance off?
How much did she save in interest by paying the loan off in one year??
Answers
Reiny
payment for the 3-year plan:
i = .12/12 = .01
n = 36
payment = x
x ( 1 - 1.01^-36 )/.01 = 5000
x (30.10750504) = 5000
x = 166.07
balance owing at the end of 1 year
= 5000(1.01)^12 - 166.07(1.01^12 - 1)/.01
= 3527.92
Can you take if from there ?
i = .12/12 = .01
n = 36
payment = x
x ( 1 - 1.01^-36 )/.01 = 5000
x (30.10750504) = 5000
x = 166.07
balance owing at the end of 1 year
= 5000(1.01)^12 - 166.07(1.01^12 - 1)/.01
= 3527.92
Can you take if from there ?