PROBLEM SOLVING
An amortized loan amounting to P360,000 is charged with an interest rate of 7% per annum. If payment will be made annually for 2 years, how much is the periodic payment?(SHOW SOLUTION)..
An amortized loan amounting to P360,000 is charged with an interest rate of 7% per annum. If payment will be made annually for 2 years, how much is the periodic payment?(SHOW SOLUTION)..
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Answer:
year 1 180,000 + 25,200 = 205,200
year 2 180,000 +12,600 = 192,600
Step-by-step explanation:
360,000 x 7% = 25,200 year 1 ; 360,000 -180,000 = 180,000 x 7%= 12,600
assuming two equal annual installment.
interest computed based on diminishing balance of unpaid principal
year 1 180,000 + 25,200 = 205,200
year 2 180,000 +12,600 = 192,600