A loan of £4,000 is to be repaid over 5 years by a level annuity payable monthly in arrears. The amount of the monthly payment is calculated on the basis of an interest rate of 1% per month effective. Task : Find the amount of the loan that has been repaid after 30 months. Answer: The loan outstanding after 30 months is a)L(1+i)^t-x∑_(s=1)^t(1-i)^s b)L(1+i)^t-x∑_(s=2)^t(1+i)^s c)x·a_30] d)a_30] Hence a)£1744.12 b)£1644.12 c)£1603.69 d)£1703.69 has been repaid at that point in time. They are multiple-choice questions
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
A loan of £4,000 is to be repaid over 5 years by a level
Task : Find the amount of the loan that has been repaid after 30 months.
Answer: The loan outstanding after 30 months is
a)L(1+i)^t-x∑_(s=1)^t(1-i)^s
b)L(1+i)^t-x∑_(s=2)^t(1+i)^s
c)x·a_30]
d)a_30]
Hence a)£1744.12 b)£1644.12 c)£1603.69 d)£1703.69 has been repaid at that point in time.
They are multiple-choice questions
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