honky tonk
in Miracle World
I've been stuck on this question for hours! Can someone please help? It's an annuity question:
Will and Penny take out a loan of $120,000 over 20 years at 7.25% pa interest compounding monthly. Their repayment is $949 per month. After 3 years of repaying the loan, Will wins $30,000. They pay this amount off their loan.
(a) How long will it now take to repay the loan?
(b) Calculate the total amount that would have been paid without the lump sum.
(c) How much is saved by making the lump sum payment?
I don't even know if this should involve the future value, present value or even the compound interest formula!?
*sob*
Will and Penny take out a loan of $120,000 over 20 years at 7.25% pa interest compounding monthly. Their repayment is $949 per month. After 3 years of repaying the loan, Will wins $30,000. They pay this amount off their loan.
(a) How long will it now take to repay the loan?
(b) Calculate the total amount that would have been paid without the lump sum.
(c) How much is saved by making the lump sum payment?
I don't even know if this should involve the future value, present value or even the compound interest formula!?
*sob*