Question

You have taken an amortized loan at 7.2 percent for 6 years to pay off your new car, which costs $15000. After 2 years of making monthly payments of $257.18, you decide to pay off the loan. Find the unpaid balance. Assume monthly payments.

Someone please help me!

Answer 1

@jim_thompson5910 can you help me?

Answer 2

is interest compounded?

Answer 3

doesnt say.

Answer 4

Lets assum its normal simple interest. How much money have you earned?

Answer 5

I have no idea lol!

Answer 6

See...you make $ 257.18 monthly..so in 2 years ull make $ 257.18 x 2 x 12 wont u?

Answer 7

6172.32

Answer 8

so is it 8827.68?

Answer 9

And ur interest is calculated by the formula

p x r x t / 100

p=principal=15000
r=rate=7.2
t=time=6 yrs

So whats the interst?

Answer 10

6480

Answer 11

do I add those two numbers together? so 12652.32 subtracted from 15000?

Answer 12

Youve already paid 6172.32..you have to pay 15000+6480

Answer 13

so now find the remaining

Answer 14

so 15307.68?

Answer 15

i guess

Answer 16

lol thanks

Answer 17

No problem maam

Answer 18

I agree with the method that him1618 used, but I'm not too sure about the fact that simple interest is used. I'm looking at a formula here, but again, I'm not too sure

http://www.vertex42.com/ExcelArticles/amortization-calculation.html

My guess is that you solve for P to find the total loan amount