Asked by Karen
If Ginny took out a loan for 21,000 in 8/2011 at 6.5% and wants to pay off in 9/2013, and has been making monthly payments of $239.00 how much will she be charged to pay it all? Please help. Thanks
Answers
Answered by
Reiny
In short, you want to know the outstanding balance after making 24 payments.
rate = .065/12 = .00541666...
Value of her $21,000 if she had made no payments:
= 21000(1.00541666..)^24 = 23907.00
Amount of 24 payments of 239
= 239( 1.005416666..^24 - 1)/.005416666..
= 6107.91
so the balance = 23907.00 - 6107.91 = $17,799.10
rate = .065/12 = .00541666...
Value of her $21,000 if she had made no payments:
= 21000(1.00541666..)^24 = 23907.00
Amount of 24 payments of 239
= 239( 1.005416666..^24 - 1)/.005416666..
= 6107.91
so the balance = 23907.00 - 6107.91 = $17,799.10
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