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Two Individuals to an Individual Form

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Instructions and help about Two Individuals To An Individual

Hey ladies and gentlemen is Professor Williams and today we're gonna look at how we can use present value and this be a two plus two calculate the remaining balance on a loan so we have Tom who bought a truck 21 for $21,000 two years ago and he got a three year loan at 7.2 percent Interest and what he's decided is that if he can get enough money from the sale of the truck to pay off his loan balance then he's going to go ahead and sell this truck so first thing we have to do is calculate how much his monthly payment was and then we can use his monthly payment and the remaining time on the loan to calculate the present value or the current outstanding balance of his loan so we need to get our time value of money stuff together here and the way that we're gonna do that is first look at the number of months right so he got a three year loan and he was making 12 monthly payments so had a total of 36 loan payments his interest rate was seven point two percent

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