# Financial Maths Help!Watch

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#1
Maddie and Lee have a house loan for \$220 000 at 8.5% p.a. compounded monthly. They pay \$2050 per month.
(a) How much will they owe on the house after 7 years?
(b) If they pay a lump sum of \$8000 on the loan after 7 years from the start , determine the new repayments to pay out the loan in another 10 years

0
5 years ago
#2
You know how much they owe at t=7. Subtract 8000 to find the present value of that loan.

Then use standard geometric progression to find out the amount of the repayments. Essentially you will have an 10 year p-thly annuity with present value (answer from part b) - 8000.
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