Question

A $12,000 loan is to be amortized for 10 years with quarterly payments of $383.06. If the interest rate is 5%, compounded quarterly, what is the unpaid balance immediately after the sixth payment? (Round your answer to the nearest cent.)

Answer 1

Unpaid balance immediately after the sixth payment	=	Present value of remaining quarterly payments
	=	quarterly payment	*	Present value of annuity of 1
	=	$       383.06	*	27.56046
	=	$ 10,557.31
Working:
Present value of annuity of 1	=	(1-(1+i)^-n)/i		Where,
	=	(1-(1+0.0125)^-34)/0.0125		i	=	5%/4	=	0.0125
	=	27.5604564		n	=	(10*4)-6	=	34