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How do you find the remaining balance on an amortizing loan after a certain number of payments?*Divide the remaining payments by the interest rateSubtract the payments made from the original principalUse an amortization schedule or formula to calculate the remaining principalSubtract the interest paid from the total loan amount

Question

How do you find the remaining balance on an amortizing loan after a certain number of payments?*Divide the remaining payments by the interest rateSubtract the payments made from the original principalUse an amortization schedule or formula to calculate the remaining principalSubtract the interest paid from the total loan amount

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Solution

To find the remaining balance on an amortizing loan after a certain number of payments, follow these steps:

  1. Use an Amortization Schedule: An amortization schedule is a table that details each periodic payment on an amortizing loan. The schedule breaks down each payment into principal and interest, and shows the remaining balance after each payment. You can find the remaining balance after a certain number of payments by looking at the corresponding row in the schedule.

  2. Use an Amortization Formula: If you don't have an amortization schedule, you can use the amortization formula to calculate the remaining balance. The formula is:

    P = [r*PV(1 + r)^n] / [(1 + r)^n - 1]

    Where: P = loan payment r = monthly interest rate PV = loan amount n = number of payments

    Solve the formula for the remaining balance after a certain number of payments.

  3. Subtract the Payments Made from the Original Principal: This method gives you a rough estimate of the remaining balance. It doesn't take into account the interest that accrues on the loan, so it's less accurate than the other methods.

  4. Subtract the Interest Paid from the Total Loan Amount: This method also gives you a rough estimate of the remaining balance. It's more accurate than the previous method, but less accurate than using an amortization schedule or formula.

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