A loan is being repaid with 20 annual payments of 180 each, Ask an Expert

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A loan is being repaid with 20 annual payments of $180 each. At the time of the 5th payment, the borrower is allowed to pay an extra $300 and to repay the remaining outstanding balance over the next 11 years with revised level annual payments. If the effective interest rate is 4%, how much interest did the borrower save by making the additional payment and shortening the loan? (Note; this is the total dollar amount of interest saved; not the present value or accumulated value of the interest saved.)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91546324

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