Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ann established a home equity line of credit. The interest rate is recalculated at the beginning of each year at prime + 1% convertible monthly.

Ann established a home equity line of credit. The interest rate is recalculated at the beginning of each year at prime + 1% convertible monthly. Ann withdrew $2,000 on 1/1/90 and began making payments of $100 every month starting on 2/1/90. The prime rate increased from 11% on 1/1/90 to 12% on 1/1/91. Immediately after making her payment on 4/1/91, Ann withdrew an additional $4,000. Her payments remained at $100 per month. 


What was the amount of principal, P, in her next payment on 5/1/91?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

To calculate the amount of principal in Anns next payment on 5191 we need to consider the loan balan... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Business Mathematics With Canadian Applications

Authors: Ali R. Hassanlou, S. A. Hummelbrunner, Kelly Halliday

12th Edition

0135285011, 978-0135285015

More Books

Students also viewed these Finance questions