SOLUTION: Linda borrowed money from a bank that offers an interest rate of 12% compounded monthly. Her monthly amortization for 5 years is $11,122.22. How much is the outstanding balance aft
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-> SOLUTION: Linda borrowed money from a bank that offers an interest rate of 12% compounded monthly. Her monthly amortization for 5 years is $11,122.22. How much is the outstanding balance aft
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Question 1173814: Linda borrowed money from a bank that offers an interest rate of 12% compounded monthly. Her monthly amortization for 5 years is $11,122.22. How much is the outstanding balance after the 12th payment? Answer by CPhill(1959) (Show Source):
You can put this solution on YOUR website! Here's how to solve this problem:
**Understanding the Concepts**
* **Compounded Monthly:** The interest is calculated and added to the principal each month.
* **Amortization:** The process of paying off a loan over time with regular payments.
* **Outstanding Balance:** The remaining amount owed on the loan after a certain number of payments.
**Steps to Solve**
1. **Calculate the Original Loan Amount:**
* We can use the present value of an annuity formula to find the original loan amount. The provided code already does this.
2. **Calculate the Remaining Balance:**
* After 12 payments, the remaining balance is the present value of the remaining payments. The provided code also does this.
**Using the provided code result**
The provided code calculated the outstanding balance to be $422354.73
**Answer:**
The outstanding balance after the 12th payment is $422,354.73.
