Engineering Board Exam Reviewer · Loan Amortization · medium
A loan of P400,000 at 12% compounded monthly is paid by P10,000 monthly payments for 36 months, with a balloon payment due together with the 36th payment to settle the loan. Find the balloon payment.
- P40,000
- P141,538.73
- P301,075.05
- P572,307.51
Answer
B. P141,538.73
Solution
The balloon is the loan's future value less the future value of the payments: B=400,000(1.01)36-10,000(F/A,0.01,36)=572,307.51-430,768.78=P141,538.73.
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