Vernon has obtained a $105,000, 5/1 30-year ARM at 5%. During the first 3 years, he has an option of paying interest only. If he
2 answers:
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Answer:
It takes 14 years for the account balance to reach $10,296.62
Step-by-step explanation:
Given:
Principal amount = $5,887
Rate of interest = 4% and 12 times per year
Balance amount = $10296.62
To find:
The time to reach $10,296.62 = ?
Solution:
We know that
Here,
N(t) = 10,296.62
= $5,887
r = 4 % = 0.04
we have to find the t value
On substituting the given values
Taking ln to remove e we get
ln
ln(1.749) = 0.04t
t = 13.97
t = 14