Philip borrowed a loan of $12,000 for 29 years and financed it by 15 level payments payable at the end of every alternate year, with the first payment due at the end of the first year. The effective annual interest rate is 4%. Just before the fifth payment was due, Philip lost his job and the lender reduced the level payment by extending the loan for 6 more years. (a) Find the amount of the original installments. (b) Find the outstanding loan balance just before the fifth payment is due. (c) Find the amount of extra interest that Philip has to pay because of the extension of the loan.
Philip borrowed a loan of $12,000 for 29 years and financed it by 15 level payments payable at the end of every alternate year, with the first payment due at the end of the first year. The effective annual interest rate is 4%. Just before the fifth payment was due, Philip lost his job and the lender reduced the level payment by extending the loan for 6 more years. (a) Find the amount of the original installments. (b) Find the outstanding loan balance just before the fifth payment is due. (c) Find the amount of extra interest that Philip has to pay because of the extension of the loan.
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Philip borrowed a loan of $12,000 for 29 years and financed it by 15 level
payments payable at the end of every alternate year, with the first payment
due at the end of the first year. The effective annual interest rate is 4%. Just
before the fifth payment was due, Philip lost his job and the lender reduced
the level payment by extending the loan for 6 more years.
(a) Find the amount of the original installments.
(b) Find the outstanding loan balance just before the fifth payment is due.
(c) Find the amount of extra interest that Philip has to pay because of the
extension of the loan.
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