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Please determine the amount of the 21 (and the final payment on the $100,000 loan when 20 payments of \$10,000 have already been made. The interest rate remains at 8% per year

Solution

The keyward here is "payment", meaning we are considering Plan 2 in Table 4-1. The 21 degrees (and the final) payment will be made at the end of the 21 degrees period. Do remember that all the payments will be the same, and the amount covers both the accrued interest and the principal. If we take a closer look at Table 4-1, we will find that the last payment will be exactly the same as what you owed at the end of the last period.

Click to see additional instructions Scenario 3 (Example 4-17) Please determine the amount of the 21" (and the final) payment on the $100,000 loan when 20 payments of $10,000 have already been made. The interest rate remains at 8% per year. Solution The keyword here is "payment", meaning we are considering Plan 2 in Table 4-1. The 21" (and the final) payment will be made at the end of the 21" penod Do remember that all the payments will be the same, and the amount covers both the accrued interest and the principal. If we take a closer look at Table 4-1, we will find that the last payment will be exactly the same as what you owed at the end of the last period. Now, int- % per year %/12 per month nper which we know based on the statement of the final payment, PV=$ which is the dollar amount of the loan; and FV=S ,as we paid off everything at the last payment. per period. Write down your answer to the second So the amount of the 21" payment, which is the same as the other payments, $ decimal point. Now if the rate was adjusted to 7.2% per year, the payment schedule was changed from 21 months to two years, and the loan amount was still the same, the Write down your answer to the second decimal point. In addition to the longer loan period, the monthly payment would become s lower interest makes the monthly payment even lower. Click to see additional instructions Scenario 3 (Example 4-17) Please determine the amount of the 21" (and the final) payment on the $100,000 loan when 20 payments of $10,000 have already been made. The interest rate remains at 8% per year. Solution The keyword here is "payment", meaning we are considering Plan 2 in Table 4-1. The 21" (and the final) payment will be made at the end of the 21" penod Do remember that all the payments will be the same, and the amount covers both the accrued interest and the principal. If we take a closer look at Table 4-1, we will find that the last payment will be exactly the same as what you owed at the end of the last period. Now, int- % per year %/12 per month nper which we know based on the statement of the final payment, PV=$ which is the dollar amount of the loan; and FV=S ,as we paid off everything at the last payment. per period. Write down your answer to the second So the amount of the 21" payment, which is the same as the other payments, $ decimal point. Now if the rate was adjusted to 7.2% per year, the payment schedule was changed from 21 months to two years, and the loan amount was still the same, the Write down your answer to the second decimal point. In addition to the longer loan period, the monthly payment would become s lower interest makes the monthly payment even lower