Answer:
a.) 1908.30
b.) 96373.15
c.)302491.15
unrounded answers below
Step-by-step explanation:
The amount that is to be loaned out is 380000-110000=270000
The effective montly rate is .07/12=.005833333
a.)
[tex]270000=x(\frac{1-(1+.005833333)^{-(25*12)}}{.005833333})=1908.303833[/tex]
b.)
use what is called the prospective method (the outstanding loan balance at time n is equal to the present value of the remaining payments)
[tex]1908.303833(\frac{1-(1+.005833333)^{-(25*12-20*12)}}{.005833333})=96373.14775[/tex]
c.)
total paid= 1908.303833*12*25=572491.1499
amount of loan: 270000
Total interest paid:
572491.1499-270000=302491.1499
