Question

Roberto and Maria Martinez have a new loan in the amount of $80,000. The interest rate is 10%. The monthly payments are $710, principal and interest. What is their loan balance after the they make two month’s worth of loan payments?

Answer 1

$79,913

Step-by-step explanation:

The computation of the loan balance after two months loan payments is shown below:

$80,000 × 10% = $8,000 ÷ 12 =$666.67

$710 - $666.67 = $43.33

$80,000 - $43.33 = $79,956

$79,956 × 10% = $7,995 ÷ 12 = $666.30

$710 - $666.30 = $43.70

$79,956 - $43.70 = $79,912.8 i.e. $79,913

Hence, the loan balance after two months is $79,913