Question

Maurice took out a 25-year loan from his bank for $165,000 at an APR of 2.4%, compounded monthly. If his bank charges a prepayment fee of 6 months' interest on 80% of the balance, what prepayment fee would Maurice be charged for paying off his loan 11 years early? A. $818.55 B. $740.77 C. $585.55 D. $731.94

Answer 1

First compute 25-11=14 years. 
Computing the yearly interest:
$165,000(1+0.024)^{25}=298526$
$\frac{298526}{25}=11941,04/year$
After 14 years, the amount paid by maurice s the following:
$11941,04\times11=\ 131351$
So there remains 
$298526-131351=\ 167175$
Compute 80% of \$167175:
$\ 167175\times0.8=\ 133740$
2.4/6=0.4%
Compute 0.4% of $133740:
$133740\times0.004=\ 534$

The correct answer is C. 

Answer 2

Answer:

8118

Step-by-step explanation: