Question

You borrowed today $50,000 at 12% compounded monthly to be paid back in 36 months. You are expected to pay accumulated interest and 1/36th of the principle each month. How much is your 20th payment?

Answer 1

The 20th payment willbe for 1,625

Step-by-step explanation:

interest 12% annual

compounding monthly: 12% / 12 = 1%

payment at 20th month

First we will calcualte the principal at the moment of the 20th payment

`principal * (n- k+1)/n = principal_k`

`50,000 * (36- 20+1)/36 = principal_(20)`

principal after 19th payment: 23,611.11

23,611.11 x 1% = 236.11 interest expense

principal amortization

50,000 x 1/36 = 1.388,89

total cuota= interest + principal amortization =

236.11 + 1,388.89 = 1,625