Question

Reducible interest at 6% pa is charged on a loan of $50 000. Annual repayments of

Answer 1

1. The loan balance after 2 years is $45,262.

2. The loan balance after 3 years is $42,678.

3. The loan balance after 1 year is $47,700.

What is the loan balance?

The loan balance is the amount remaining from the principal amount after the deduction of repayment and the addition of interest for the period.

The loan balance can be computed manually as below:

Data and Calculations:

Loan amount = $50,000

Interest rate = 6%

Annual repayments = $5,000

1st year:

Loan amount = $50,000

Repayment = ($5,000)

Interest = $2,700 ($50,000 - $5,000) x 6%

Loan balance = $47,700 ($50,000 - $5,000 + $2,700)

2nd year:

Loan balance = $47,700

Repayment = ($5,000)

Interest = $2,562 ($47,700 - $5,000) x 6%

Loan balance = $45,262 ($47,700 - $5,000 + $2,562)

3rd year:

Loan balance = $45,262

Repayment = ($5,000)

Interest = $2,416 ($45,262 - $5,000) x 6%

Loan balance = $42,678 ($45,262 - $5,000 + $2,416)

Thus, the loan balance after 3 years is $42,678.

Learn more about computing loan balances at brainly.com/question/24576997

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