A company that purchases a piece of equipment by borrowing $500,000 for 8 years at an annual rate of 6.5%, compounded monthly, has monthly payments of $6,693.12. Find the unpaid balance on this loan after 1 year. Round your answer to the nearest cent.
A)$389,067.30
B)$450,732.26
C)$322,557.83
D)$250,823.23
E)$534,911.03

Question

A company that purchases a piece of equipment by borrowing $500,000 for 8 years at an annual rate of 6.5%, compounded monthly, has monthly payments of $6,693.12. Find the unpaid balance on this loan after 1 year. Round your answer to the nearest cent. ​
A)$389,067.30
B)$450,732.26
C)$322,557.83
D)$250,823.23
E)$534,911.03

Quizplus · Accepted Answer

The unpaid balance after 1 year can be calculated using the formula for the remaining balance of an amortizing loan. After 12 payments, the remaining balance is $450,732.26.

A Company That Purchases a Piece of Equipment by Borrowing