Leon borrowed $10,000 at 8.7% compounded annually. Provided that he made a payment of $7,000 after 3 years, how much is he expected to pay to clear the loan 5 ½ years from the date of borrowing?
$ 7,198.77
Step-1:Calculation of total amount due 3 years from now | ||
Total Amount due 3 years from now | = fv(rate,nper,pmt,pv) | |
= $12,843.66 | ||
Where, | ||
rate | = | 8.70% |
nper | = | 3 |
pmt | = | 0 |
pv | = | -10,000 |
Step-2:Calculation of balance of loan due 3 years from now | ||
Total amount due 3 years from now | $12,843.66 | |
Less amount repaid | 7,000.00 | |
Balance Loan amount | $ 5,843.66 | |
Step-3:Calculation of final amount 5 1/2 years from now to be paid | ||
Total Amount due 5 1/2 years from now | =fv(rate,nper,pmt,pv) | |
= $7,198.77 | ||
Where, | ||
rate | = | 8.70% |
nper | = | 2.5 |
pmt | = | 0 |
pv | = | -5,843.66 |
Note: | ||
5 1/2 Years from now is equal to 2.5 years from 3 years from now. |
Get Answers For Free
Most questions answered within 1 hours.