Ask Question
17 November, 22:21

A 20-year loan of 2,500 is repaid with payments at the end of each year. Each of the first ten payments equals 175% of the amount of interest due. Each of the last ten payments is X. The lender charges interest at an annual effective rate of 5%. Calculate X

+2
Answers (1)
  1. 18 November, 01:26
    0
    The answer is 156.25

    Explanation:

    In the 1st year:

    - Interest: 2,500 x 5% = 125

    - Payment amount: 125 x 175% = 218.75

    - Principal: 218.75 - 125 = 93.75

    Hence, the principal payment in 20 year loan as follow:

    10 x 93.75 + 10 x X = 2,500

    => X = 156.25
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A 20-year loan of 2,500 is repaid with payments at the end of each year. Each of the first ten payments equals 175% of the amount of ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers