Suppose you take out a loan from the local mob boss for $10,000.Being a generous banker,the mob boss offers you an APR of 60% with monthly compounding.The length of the loan is 3 years with monthly payments.However,you want to get out of this arrangement as quickly as possible.You decide to pay off whatever balance remains after the first year of payments.What is your remaining balance after one year?

Question

Quizplus · Accepted Answer

n=36,r=60%/12=5%,PV=$10,000,FV=0,PMT=$604.34
Use AMORT:
P1=1,P2=12,BALANCE = $8339.13

Suppose You Take Out a Loan from the Local Mob