Question

The right answer is F but I don’t know how to do it

u Mr. and Mrs. LN. Debt took out a 10-year, SI 55,000 loan at a rate of 36 % per year, comp ounded monthly They decided to pay the balance on the loan after paying 5 years worth of payments. The payoff amount for the loan is closest to .. a) $70,554.26 b) $70,406.11 c)$93,657.35 d) S61,342.65 e) $84,334.58 ) $84,445.74 g) $84,753.18 h) $70,665.42 i) $70,758.90 j) $91,834.32 k) $57,841.0 I) $57,459.88 m) $102,322.50 n) $101, 994.36 o) $77,500 P) S55,800 q) $5,580

Answer 1

the principal amount of loan is $155,000 and we shall pay an equal monthly installment for 10 years to repay the loan.

so, as per original terms, we are required to pay $1540.00 as calculated in the image.

now we shall calculate the future value of $155,000 at 60th month when the loan is to be repaid. (FV1)

we shall also calculate the future value of 60 installments of $1,540.00 paid at 60th month when the loan is to be repaid. (FV2)

now that both the figures are at 60th month, we shall deduct the FV2 from FV1 to know the principal loan remaining and that shall be the payoff amount.

formula view -