Question

Jean Claude took out a $3,500 installment loan at 11% for 12 months. His monthly payments were $309.34. After seven payments, the balance due was $1,505.04. If Jean pays off the loan with the eighth payment, how much will he save?

Answer 1

Answer:

Jean saved $27.84.

Step-by-step explanation:

Here p = 3500

r = 11%

time = 12 months

Monthly payment = $309.34

Now, I have solved this question using excel.

You can see in the sheet, that the highlighted amount of $212.03 was the intended interest if it was paid for full 12 months.

But as given that Jean paid off the loan with 8th payment, that means he saved interest of 9th, 10th, 11th and 12th months.

These add up to :  $11.09+8.35+5.59+2.81 =27.84$ dollars

Therefore, Jean saved $27.84.

Download xlsx

Answer 2

$27.86 is the answer