) Nancy takes out a 22-year home loan. She makes equal month-end repayments including the principal and the interest. For the first 7 years, Nancy needs to repay $3,500 each month. From the end of year 7, the interest rate changes to 4.2% p.a. compounded monthly and Nancy needs to repay $3,800 every month to be able to repay the loan on time. Use the prospective method to find the loan outstanding balance at the end of year 7. (Round your answer to the nearest cent.)
) Nancy takes out a 22-year home loan. She makes equal month-end repayments including the principal and the interest. For the first 7 years, Nancy needs to repay $3,500 each month. From the end of year 7, the interest rate changes to 4.2% p.a. compounded monthly and Nancy needs to repay $3,800 every month to be able to repay the loan on time. Use the prospective method to find the loan outstanding balance at the end of year 7. (Round your answer to the nearest cent.)
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 25PROB
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2b
Transcribed Image Text:b) Nancy takes out a 22-year home loan. She makes equal month-end repayments including the principal and
the interest. For the first 7 years, Nancy needs to repay $3,500 each month. From the end of year 7, the
interest rate changes to 4.2% p.a. compounded monthly and Nancy needs to repay $3,800 every month to be
able to repay the loan on time. Use the prospective method to find the loan outstanding balance at the end of
year 7. (Round your answer to the nearest cent.)
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