Show the progress of the following loans over the first two months. Interest is calculated daily.

Ks spa over 3 years and 6 months at [tex]12.5 \%[/tex] a, with monthly renavmants

Calculate the monthly interest for the first loan in month 1: 12350 × 365 0.06 ​ × 30 ≈ 61.05 , and the remaining balance: 12350 + 61.05 − 275.67 = 12135.38 .
Calculate the monthly interest for the first loan in month 2: 12135.38 × 365 0.06 ​ × 30 ≈ 59.99 , and the remaining balance: 12135.38 + 59.99 − 275.67 = 11919.70 .
Calculate the monthly interest for the second loan in month 1: 16740.2 × 365 0.125 ​ × 30 ≈ 172.85 , and the remaining balance: 16740.2 + 172.85 − 476.86 = 16436.19 .
Calculate the monthly interest for the second loan in month 2: 16436.19 × 365 0.125 ​ × 30 ≈ 169.71 , and the remaining balance: 16436.19 + 169.71 − 476.86 = 16129.04 .

Explanation

Understanding the Problem We are asked to show the progress of two loans over the first two months, with interest calculated daily. We will calculate the remaining balance for each month by adding the monthly interest and subtracting the monthly payment.

First Loan: Setting up the Calculations For the first loan, the loan amount is K12350, the monthly repayment is K275.67. We will approximate the annual interest rate as 6%. The daily interest rate is then calculated as 365 0.06 ​ .

First Loan: Month 1 Progress Month 1:



Starting balance: K12350
Daily interest rate: 365 0.06 ​ ≈ 0.00016438
Monthly interest: 12350 × 0.00016438 × 30 ≈ 61.05
Balance after interest: 12350 + 61.05 = 12411.05
Remaining balance: 12411.05 − 275.67 = 12135.38


First Loan: Month 2 Progress Month 2:


Starting balance: K12135.38
Daily interest rate: 365 0.06 ​ ≈ 0.00016438
Monthly interest: 12135.38 × 0.00016438 × 30 ≈ 59.99
Balance after interest: 12135.38 + 59.99 = 12195.37
Remaining balance: 12195.37 − 275.67 = 11919.70


Second Loan: Setting up the Calculations For the second loan, the loan amount is K16740.2, the annual interest rate is 12.5%. The monthly repayment is assumed to be K476.86. The daily interest rate is then calculated as 365 0.125 ​ .

Second Loan: Month 1 Progress Month 1:



Starting balance: K16740.2
Daily interest rate: 365 0.125 ​ ≈ 0.00034247
Monthly interest: 16740.2 × 0.00034247 × 30 ≈ 172.85
Balance after interest: 16740.2 + 172.85 = 16913.05
Remaining balance: 16913.05 − 476.86 = 16436.19


Second Loan: Month 2 Progress Month 2:


Starting balance: K16436.19
Daily interest rate: 365 0.125 ​ ≈ 0.00034247
Monthly interest: 16436.19 × 0.00034247 × 30 ≈ 169.71
Balance after interest: 16436.19 + 169.71 = 16605.90
Remaining balance: 16605.90 − 476.86 = 16129.04


Final Answer Therefore, the progress of the loans over the first two months is as follows:

First Loan: Month 1: Remaining balance = K12135.38 Month 2: Remaining balance = K11919.70
Second Loan: Month 1: Remaining balance = K16436.19 Month 2: Remaining balance = K16129.04
Examples
Understanding loan progress is crucial in personal finance. By tracking the monthly interest and remaining balance, individuals can make informed decisions about their repayment strategies. For example, knowing how much of each payment goes towards interest versus principal can help in deciding whether to refinance or make extra payments to reduce the loan term and overall interest paid. This detailed analysis allows for better financial planning and management.

Answered by GinnyAnswer | 2025-07-03

Over the first two months, the balance of the loan decreases as payments are made and interest is accrued daily. After Month 1, the remaining balance is K12226.83, and after Month 2, it is K12102.27. Monitoring these changes helps in understanding the impact of interest on loan payments.
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Answered by Anonymous | 2025-07-04