By which period would you have repaid the loan

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Reference no: EM131980886

You take on a loan of $800,000 with monthly payments at a quoted rate of 1.5% per annum for 25 years. At the same time, you deposit $300,000 in a savings plan with interest at an annual rate of 2.5% with monthly compounding.

You use the money in the savings account to fund excess monthly loan payments for the next 5 years and use the reamining money in the savings account after the 5 years to make a lump-sum loan repayment.

i. What is the loan balance after 5 years?

ii. By which period would you have repaid the loan?

Reference no: EM131980886

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