Answer:
7.28 years
Step-by-step explanation:
Given that:
A partially amortizing loan of with a present value = $200000
is made with a 4.55% annual interest rate.
i.e rate (4.55/100) ÷ 12
= 0.0455 ÷ 12
= 0.00379
A balloon of $20,000 exists on the loan
This implies that the Present value of the loan = 20000
If the monthly payments PMT are $2,500
The number of years that it will require for the loan to be fully repaid can be calculated by using the EXCEL FUNCTION (=NPER(0.00379;-2500;200000;-20000;0) )
= 87.3997 /12
= 7.28 years
The Excel computation can be found in the attached file below
