Question
Mr. B borrows an amount from the bank today and agrees to repay the loan by monthly payments (of amount each) plus 1 balloon payment
Mr. B borrows an amount from the bank today and agrees to repay the loan by monthly payments (of amount each) plus 1 balloon payment (smallest balloon payment) made one month after the h payment. The first repayment is made one month after today. You are given that
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The loan charges compound interest at an annual effective interest rate = 21.7%
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The interest-due in 10th payment is 1030.847.
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The principal repaid in 20th payment is 1848.1581.
Using prospective method, calculate the outstanding balance at 15th payment date. (Hint: What quantity do you need to calculate the balloon payment?)
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