Business, 13.06.2021 02:50 juliannxkim

The reduction in principle of the 13th payment is 50% larger than the reduction in principle of the 5th payment. What is the total amount of interest paid on the loan

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Answer from: sbm1girl

Complete Question:

A 20-year level repayment of a loan of 1000 has been scheduled. Recall that in such scenarios, as time progresses the reduction in principal part of each payment increases as the interest part of each payment decreases. The reduction in principle of the 13th payment is 50% larger than the reduction in principal of the 5th payment. What is the total amount of interest paid on the loan?

At an assumed interest rate of 6%, the Total Interest on the Loan is:

= $743.69

Explanation:

a) Data and Calculations:

Amount of loan = $1,000

Period of loan = 20 years

Assumed interest rate = 6%

Loan Amount 1000

Loan Term

20 years 0 months

Interest Rate 6

Compound

Annually (APY)

Pay Back Every Year

Results:

Payment Every Year $87.18

Total of 20 Payments $1,743.69

Total Interest $743.69

View Amortization Table

Principal 57%

Interest 43%

Amortization Schedule

Beginning Interest Principal Ending

Balance Balance

1 $1,000.00 $60.00 $27.18 $972.82

2 $972.82 $58.37 $28.82 $944.00

3 $944.00$56.64 $30.54 $913.46

4 $913.46 $54.81 $32.38 $881.08

5 $881.08 $52.86 $34.32 $846.76

6 $846.76 $50.81 $36.38 $810.38

7 $810.38 $48.62 $38.56 $771.82

8 $771.82 $46.31 $40.88 $730.94

9 $730.94 $43.86 $43.33 $687.61

10 $687.61 $41.26 $45.93 $641.69

11 $641.69 $38.50 $48.68 $593.00

12 $593.00 $35.58 $51.60 $541.40

13 $541.40 $32.48$54.70$486.70

14 $486.70 $29.20$57.98$428.71

15 $428.71 $25.72$61.46$367.25

16 $367.25 $22.04$65.15$302.10

17 $302.10 $18.13$69.06$233.05

18 $233.05 $13.98$73.20$159.84

19 $159.84 $9.59$77.59$82.25

20 $82.25 $4.93$82.25$0.00

Answer from: Quest

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Answer from: Quest

apex verified answer < 3

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