You are considering taking out a loan of $17,000.00 that will be paid back over 5 years with monthly payments of $330.24. If the interest rate is 6.2% compounded monthly, what would the unpaid balance be immediately after the eleventh payment? The unpaid balance would be?
You are considering taking out a loan of $17,000.00 that will be paid back over 5 years with monthly payments of $330.24. If the interest rate is 6.2% compounded monthly, what would the unpaid balance be immediately after the eleventh payment? The unpaid balance would be?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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You are considering taking out a loan of $17,000.00 that will be paid back over 5 years with monthly payments of $330.24. If the interest rate is 6.2% compounded monthly, what would the unpaid balance be immediately after the eleventh payment?
The unpaid balance would be?
Expert Solution
Step 1: Given information:
Here,
| Particulars | Values |
| Loan amount (PV) | $ 17,000.00 |
| Term of loan | 5.00 |
| Number of months in a year | 12.00 |
| Monthly payment of the loan (PMT) | $ 330.24 |
| Interest rate | 6.20% |
| Number of completed payments | 11.00 |
| Outstanding balance immediately after 11th payment | ?? |
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