Interest only loan:- This means every month on installment basis loan borrower will pay ONLY INTEREST on the principal amount. and the principal amount will be paid at the end of the Loan period only. No Principal amount shall be paid in between the loan period
3a) Answer:-
Calculation of monthly interest to be paid:-
= 80,000 X 7% X 1/12
= 466.67
Therefore monthly interest to be paid is 466.67
on June 13,2022 ( !st installment) he pays $1,500 but was payable only 466.67
That means he had paid interest for minimum of 3 month
Therefore on August 13, 2022 (3rd installment) there is no need to pay any amount as he had paid 3 months installment in 1st installment itself
3b) Answer:-
Loan principal amount will be completely paid off at the end of the loan period. Here in the question the term of the loan period is not clearly mentioned.
Therefore the loan amount will be paid off at the end of the term of the loan.
On May 13, 2022, a college graduate takes an interest-only loan of $80,000 at an annual interest ...
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