Question

Melanie took out a 20-year loan for $50,000 at an APR of 3.3%, compounded

Answer 1

Answer:

She would save $17,340.10.

Step-by-step explanation:

We will use formula : $A=P(1+r)^t$

A = Future amount

P = Principal amount

r = $\frac{APR}{12}$ =  $\frac{0.033}{12}$ = 0.00275

t = 20 years ( 240 months )

$A=50,000(1+0.00275)^{240}$

  = 50,000(1.00275)²⁴⁰

  = 50,000 × 1.93304052

  = $96,652.026 ≈ $96,652.03

If she paid it off 6 years early ( after 14 years ).

$A=50,000(1+0.00275)^{168}$

$=50,000(1.00275)^{168}$

 = 50,000 × 1.58623917

 = 79,311.9585 ≈ $79,311.96

She would save by paying off 6 years early = 96,652.03 - 79,311.96

                                                                        = $17,340.07 ≈ 17,340.10

She would save $17,340.10.

Answer 2

1926.17 in the answer for apex