Ben\'s home improvement loan to build a security fence around his property was f

Question

Ben's home improvement loan to build a security fence around his property was for $1,800 at 5.00% interest for 12 months use the monthly payment plans table in item 16 to calculate the monthly payment after 4 payments the balance is $1,210.01 and pays off the loan with the fifth payment how much interest did he save by paying off the loan early?

Monthly Payment Plans Monthly Payment (on a simple interest loan of $100) Tenths) |4.50%|4.75%| 5.00%| 5.25%| 5.50%|5.75%|6.00% 6 $16.89 $16.90$16.91 $16.92 $16.94 $16.95 $16.96 12 (1 yr) s8.53 $8.55 $8.56 $8.57 $8.58 $8.60 $8.61 18 $5.76 5.77 $5.78 $5.79 $5.80 $5.81 $5.82 24 Ryr) | S4.37 | $4.38 | $4.39 | $4.40 | $4.41 | $4.42 | $4.43 60(S yr) $1.86 $1.88 $1.89 $1.90 $1.91 $1.92 $1.93 months) $16 89 5$16. 9051691 516.92 516.94 516.93 516.90 12(1 yr) $8.53 $8.55 $8.56 $8.57 $8.58 $8.60 $8.61 24m) $437 $4.38 $4.39 $4.40 $441 $442 5443 t60(5yr 11.86 1.88 1891.90 1.91 |$1.921.93

Explanation / Answer

Calculate the monthly payments for 12 months:

S.No

Monthly
Installment

Interest

Principal

Balance

0

$     1,800.00

1

$        154.09

$             7.50

$          146.59

$     1,653.41

2

$        154.09

$             6.89

$          147.20

$     1,506.20

3

$        154.09

$             6.28

$          147.82

$     1,358.38

4

$        154.09

$             5.66

$          148.43

$     1,209.95

5

$        154.09

$             5.04

$          149.05

$     1,060.90

6

$        154.09

$             4.42

$          149.67

$         911.23

7

$        154.09

$             3.80

$          150.30

$         760.93

8

$        154.09

$             3.17

$          150.92

$         610.01

9

$        154.09

$             2.54

$          151.55

$         458.45

10

$        154.09

$             1.91

$          152.18

$         306.27

11

$        154.09

$             1.28

$          152.82

$         153.45

12

$        154.09

$             0.64

$          153.45

$             0.00

If pays off the loan with the fifth payment of $1210.01, save the interest of $22.80 (See the calculation of above-mentioned table sum of interest column 5 month to 12 month) did he save by paying off the loan early.

S.No

Monthly
Installment

Interest

Principal

Balance

0

$     1,800.00

1

$        154.09

$             7.50

$          146.59

$     1,653.41

2

$        154.09

$             6.89

$          147.20

$     1,506.20

3

$        154.09

$             6.28

$          147.82

$     1,358.38

4

$        154.09

$             5.66

$          148.43

$     1,209.95

5

$        154.09

$             5.04

$          149.05

$     1,060.90

6

$        154.09

$             4.42

$          149.67

$         911.23

7

$        154.09

$             3.80

$          150.30

$         760.93

8

$        154.09

$             3.17

$          150.92

$         610.01

9

$        154.09

$             2.54

$          151.55

$         458.45

10

$        154.09

$             1.91

$          152.18

$         306.27

11

$        154.09

$             1.28

$          152.82

$         153.45

12

$        154.09

$             0.64

$          153.45

$             0.00

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