Answer:
$74,748.11
Explanation:
In order to make use of the amortization formula, we need to find the equivalent monthly interest rate.
When 12% interest is compounded continuously, the annual multiplier is ...
e^0.12 ≈ 1.127497
The equivalent multiplier when the interest is compounded monthly is the 12th root of this,
(e^0.12)^(1/12) = e^0.01 ≈ 1.0100502 = 1 + r
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The amortization formula tells us that monthly payment amount A will pay off principal P in n months:
P = A(1 -(1 +r)^-n)/r = $900(1 -1.0100502^-180)/0.0100502
P = $74,748.11
The customer can pay off a 12% loan of $74,748.11 at the rate of $900 per month for 15 years.