Boat Loan Financing
John will receive a trust fund when he turns 18 years, 21 months from now. The current balance is $ 11,000 a
John will receive a trust fund, when he completes 18 years 21 months from now. The current balance is R $ 11,000 and the fund earns 7.5% interest compounded monthly. He wants to buy a Boat and he can pay $ 130 a month on a loan to finance. How much it can borrow at interest rates of 5% if you want to be able to pay the loan balance when he receive your retirement?
Hi, $ 11,000 at 7.5% interest compounded monthly for 21 months 0r 1.75 years is A = (1 + .075/12) ^ 11000 (12 * 1.75). $ 12,537.66 This causes the value it receives on his 18th birthday. I assume he can currently pay the $ 130 per month, without your inheritance. Thus, a 5% interest for 21 months or 1.75 years, assuming that interest on this loan is also calculated monthly, then 12,537.66 = Amount borrowed (1 + .05/12) ^ (1.75 * 12) 12537.66 = amount borrowed (1.004166666666) ^ 21 = 12537.66 amount borrowed (1.0912438) = $ 11,489.33 Loaned amount that can be repaid with interest of 21 months of his trust fund. This response would be different if interest rates were not calculated monthly or $ 130 if the required monthly to be included in the use of the fund. Hope that helps! 
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