A loan is amortized over five years with monthly payments at a nominal interest rate of 12% compounded monthly. The first payment is 1,000 and is to be paid one month from the date of the loan. Each succeeding monthly payment will be 1% lower than the prior payment. Calculate the outstanding loan balance immediately after the 20th payment is made.
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
A loan is amortized over five years with monthly payments at a nominal interest rate of 12% compounded monthly. The first payment is 1,000 and is to be paid one month from the date of the loan. Each succeeding monthly payment will be 1% lower than the prior payment. Calculate the outstanding loan balance immediately after the 20th payment is made.
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