Question

After making 22 payments of 647.74 on your car loan, you wanted to find out how much is left of your original 5 years loan at 4.2% compounded of 35000. What is the amount of the remaining balance of your car loan? Round balance to the nearest cent.

Answer 1

23009.87

Explanation:

Answer 2

23009.87

Explanation:

I think it has to be compounded monthly because that's how they got the 647.74

The remaining loan balance on a loan at a given period is just the present value of the remaining payments. The original loan was 5*12= 60 payments, and we have paid 22. This means that there are 60-22= 38 payments remaining. Thus, the remaining balance at this time is the present value of the 38 payments.

`647.74*(1-(1+.042/12)^(-38))/(.042/12)=23009.87048`