Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ava takes out a 20-year home loan of $300,000 from her bank. The interest rate is 3.6% p.a. compounded monthly. Ava needs to repay $1,755.33

Ava takes out a 20-year home loan of $300,000 from her bank. The interest rate is 3.6% p.a. compounded monthly. Ava needs to repay $1,755.33 at the end of each month. Which of the following gives the principal paid in the 8th year (only one correct answer)? (2 marks)

A. None of the options gives the correct answer.

B. 1755.33/0.003*(1.003^156-1)-1755.33/0.003*(1.003^144-1)

C. 1755.33/0.003*(1.003^96-1)-1755.33/0.003*(1.003^84-1)

D. 1755.33/0.003*(1-1.003^-96)-1755.33/0.003*(1-1.003^-84)

E. 1755.33/0.003*(1-1.003^-156)-1755.33/0.003*(1-1.003^-144)

If the prospective method is used to find the principal paid in the 8th year. The answer should be ( ) (1 mark. Round your answer to 2 decimal places. Do not put unit. Do not use comma separators. E.g. 1234.56)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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

Remittances And International Development

Authors: Sabith Khan, Daisha Merritt

1st Edition

0367521881, 978-0367521882

More Books

Students also viewed these Finance questions

Question

Carry out an interview and review its success.

Answered: 1 week ago