Question

Ray Flagg took out a 60-month fixed installment loan of $12,000 to open a new pet store. He paid no money down and

began making monthly payments of $232. Ray's business does better than expected and instead of making his 36th
payment, Ray wishes to repay his loan in full.

Answer 1

Ray's business is doing better than expected and instead of making his 36th payment, Ray wants to repay his loan in full.

he paid 35 monthly installments, i.e. 232×35=$8120

To calculate the balance remaining on Ray's loan after 35 months, we subtract the total amount he has already paid from the original loan amount.

it remains to reimburse 12 000-8120 = $3880

Ray's remaining balance on the loan after 35 months is $3,880. he will have to pay this remaining balance if he wants to repay the loan in full

Explanation: