Question

QUESTION 5 What is the principal (to the nearest whole dollar) remaining after 24 monthly payments have been made on a $55,000 five-year loan? The annual interest rate is 3% nominal compounded monthly. (Do not enter a dollar sign $ with your answer.)

Answer 1

P = $55,000
t = 60 months = 5 years
r = 3% annual rate

After 2 years have passed:

Payment done = 55,000{(1+0.03)^2} = $55,049.5

After 5 years have passed:

Amount to be paid = 55,000{(1+0.03)^5} = $63,760.1

Hope this helped!