Question

One of your customers is delinquent on his accounts payable balance. You’ve mutually agreed to a repayment schedule of $690 per month. You will charge 1.09 percent per month interest on the overdue balance.Required:If the current balance is $14,910, how long will it take for the account to be paid off? (Do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Answer 1

Loan repayment Schedule
Month	Opening Principle Balance	Principle repayment	Interest @ 1.09%	Instalment	Closing Principle balance
1	14,910	527	163	690	14,383
2	14,383	533	157	690	13,849
3	13,849	539	151	690	13,310
4	13,310	545	145	690	12,765
5	12,765	551	139	690	12,214
6	12,214	557	133	690	11,658
7	11,658	563	127	690	11,095
8	11,095	569	121	690	10,526
9	10,526	575	115	690	9,950
10	9,950	582	108	690	9,369
11	9,369	588	102	690	8,781
12	8,781	594	96	690	8,187
13	8,187	601	89	690	7,586
14	7,586	607	83	690	6,979
15	6,979	614	76	690	6,365
16	6,365	621	69	690	5,744
17	5,744	627	63	690	5,117
18	5,117	634	56	690	4,482
19	4,482	641	49	690	3,841
20	3,841	648	42	690	3,193
21	3,193	655	35	690	2,538
22	2,538	662	28	690	1,876
23	1,876	670	20	690	1,206
24	1,206	677	13	690	529
25	529	684	6	690	-155

Hence it will take 25 months to for the account to be paid off.