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Lilly takes out a 22-year home loan. She makes equal month-end repayments including the principal and the interest. For the first 7 years, Nancy needs
Lilly takes out a 22-year home loan. She makes equal month-end repayments including the principal and the interest. For the first 7 years, Nancy needs to repay $3,500 each month. From the end of year 7, the interest rate changes to 4.2% p.a. compounded monthly and Nancy needs to repay $3,800 every month to be able to repay the loan on time. Use the prospective method to find the loan outstanding balance at the end of year 7
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