Question

janie curtis borrowed $22,000 from a bank at an interest rate of 9% compounded monthly. this loan is to be repaid in 36 equal monthly installments over three years. immediately after her 20th payment, janie desires to pay the remainder of the loan in a single payment. compute the total amount she must pay at that time.

Answer 1

Step-by-step explanation:

Given:

• PV = $22,000

• r = 9% /12 = 0.09/12 compounded monthly

• n = 36

we need to find the payment per month:

=
`(rPV)/(1 - (1+r)^(-n) )`

=
`(0.0075*22000)/(1 - (1+0.0075)^(-36) )`

= $ 699,59

Hence, after 20th payment, she already paid:

$699,59 * 20 = $13,991.8

After we find out the Future value:

FV = PV
`(1+i)^(n)`

=$22,000(
`(1+0.0075) ^(36)`

= $28,790.20

At the end, the total amount she must pay at that time is:

FV - The amount she has already paid

= $28,790.20 - $13,991.8

=$14,794.4

Hope it will find you well.