Please Help

Question

A mortgage of 1.2% interest compounded monthly with a monthly payment of $600 has an unpaid balance of $6753 after 100 months. Find the unpaid balance after 101 months.

Answer 1

The formula is FV = PV(1+i)^n

 

Since PV = $6753

i=.12/12 = .01

n=1 (1 month difference),
We calculate FV.

PV = $6753 (1.01) = $6820.53.

This is the value of the loan at time t=101 months.

if we are making our $600 monthly payment on this then the Balance = $6820.53 - $600 = $6220.53.