Question 882666: Hi! Could you please help me with the following question:
A personal loan of $20,000 is taken out for a period of 5 years, at a simple interest rate of 12% per annum. Find the amount still owing after 1 year, if payments of $100 are made every month of that year.
Answer by ankor@dixie-net.com(22740)   (Show Source):
You can put this solution on YOUR website! A personal loan of $20,000 is taken out for a period of 5 years, at a simple interest rate of 12% per annum. Find the amount still owing after 1 year, if payments of $100 are made every month of that year.
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At $100 a month you are not even paying the interest, you will actually owe more each month than you owed the month before;
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The payment on 20k loan for 5 yrs at 12% is $445 a month
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After one year of paying $100 a month you will owe $21,268 or over $1200 more than when you started the year
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