Revision as of 14:23, 19 November 2023 by Admin (Created page with "A debt is amortized with 60 equal monthly payments at an annual effective interest rate of 12%. The amount of principal in the third payment is 900. Calculate the amount of principal in the 33rd payment. <ul class="mw-excansopts"><li>668</li><li>900</li><li>1008</li><li>1195</li><li>1213</li></ul> {{soacopyright | 2023 }}")
ABy Admin
Nov 19'23
Exercise
A debt is amortized with 60 equal monthly payments at an annual effective interest rate of 12%. The amount of principal in the third payment is 900.
Calculate the amount of principal in the 33rd payment.
- 668
- 900
- 1008
- 1195
- 1213
Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.
ABy Admin
Nov 19'23
[[math]]
\begin{aligned} & 1.12=\left[1+\frac{i^{(12)}}{12}\right]^{12} \\ & \frac{i^{(12)}}{12}=0.00948879 \\ & 900=P\left(\frac{1}{1.00948879}\right)^{60-3+1} \\ & P=1556.43 \\ & P_{33}=1556.43\left(\frac{1}{1.00948879}\right)^{60-33+1}=1194.78\end{aligned}
[[/math]]
Copyright 2023 . The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.