Question

You took a loan of $40000. You make a downpayment of $5000. You pay off over a period of 10 years making a payment at the end of each quarter. What is the loan amount at the end of period 3? (The interest rate is 4% and the amount financed is 35,000)

Answer 1

The loan amount at the end of period 3 is $52,951.15.

Step-by-step explanation:

To find the loan amount at the end of period 3, we need to calculate the remaining balance after 3 years of payments.

Using the formula for compound interest, the remaining balance can be calculated as follows:

Remaining Balance = Principal * (1 + Interest Rate)^Number of Periods

Given a principal of $35,000, an interest rate of 4%, and 3 years of payments, we can substitute these values into the formula:

Remaining Balance = $35,000 * (1 + 0.04)^12

Simplifying the expression, we get:

Remaining Balance = $35,000 * 1.515717

Calculating the result, we get:

Remaining Balance = $52,951.15