Answer: $ 40331.781 (Approx)
Step-by-step explanation:
Let Monica pay off $ x in 12 years,
Thus, for 12 years, his present value, PV = $ x
Given, APR of the loan = 8.4% = 0.084
Thus, the monthly rate of the loan, r = 0.084/12 = 0.007
The number of period in 12 years, n = 144
And, the monthly payment, P = $ 990.39
Thus, by the formula,
[tex]\frac{r(PV)}{1-(1+r)^{-n}}=P[/tex]
[tex] \frac{0.007 x}{1-(1+0.007)^{-144}} = 990.39[/tex]
[tex] \frac{0.007 x}{1-0.36623195919}=990.39[/tex]
[tex]\frac{0.007 x}{0.6337680408 } = 990.39[/tex]
[tex]0.007 x=990.39\times 0.6337680408[/tex]
[tex]0.007 x=627.677529937[/tex]
[tex]x=89668.2185624[/tex]
Thus, He pay off $ 89668.2185624 of the original amount of the loan.
⇒The amount of loan left after 12 years
= 130,000 - 89668.2185624
=40331.7814376 ≈ $ 40331.781
