A $10,000 loan amortized over 5 years at an interest rate of 10% per year would require payments of $2638 to completely extinguish the loan when interest is charged on the unrecovered balance. If interest is charged on the principal instead of the unrecovered balance, what would be the balance after 5 years if the same $2638 payments are made each year?
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
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A $10,000 loan amortized over 5 years at an interest rate of 10% per year would require payments of $2638 to completely extinguish the loan when interest is charged on the unrecovered balance. If interest is charged on the principal instead of the unrecovered balance, what would be the balance after 5 years if the same $2638 payments are made each year?
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