A company borrows $100,000 with interest at j₁₂ = 9%.The loan is to be amortized by monthly payments of $1550 for as long as necessary.A final smaller payment will be calculated so the loan will be exactly repaid.The outstanding balance immediately after the 88^th payment is $796.44.What is the value of the 89^th and final payment?

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Quizplus · Accepted Answer

The final payment should cover the outstanding balance of $796.44 plus the interest for one month. The interest for one month is $796.44 * (0.09/12) = $5.97. Therefore, the final payment is $796.44 + $5.97 = $802.41.

A Company Borrows $100,000 with Interest at J12 = 9

A Company Borrows $100,000 with Interest at J₁₂ = 9