Q1 Mr. Smith borrowed $189,500 at 3.75% per year compounded monthly. Loan is for 20 years....

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Q1 Mr. Smith borrowed $189,500 at 3.75% per year compounded monthly. Loan is for 20 years. Compute the monthly payment. Q2 For the same loan in Q1, compute how many months it will take to pay the loan off, if Mr. Smith pays $100 extra to the monthly amount you computed earlier

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Answer 1

Answer #1

Q1.

Loan Amount = $189,500

Interest Rate = 3.75% compounded monthly

Annual Interest Rate = 3.82%

Loan Period = 20 years

EMI = [P x r x (1+r)ⁿ]/[(1+r)^n-1]

Monthly Payment = $1,130.44

Q2.

Monthly Payment = 1130.44 + 100 = $1,230.44

Interest Rate = 3.82%

Loan Amount = $189,500

Loan Period = 17.67 years

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Answer 2

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Q1 Mr. Smith borrowed $189,500 at 3.75% per year compounded monthly. Loan is for 20 years....

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