Question

Question #961df

Answer 1

The thing is; some of your repayment will reduce the outstanding principle sum at every payment cycle (monthly). This will have a bearing on the total amount paid.

Explanation:

`color(blue)("Using compound interest")`

Just using the information provided, without repayment

For annual calculation cycle:

`P(1+x/100)^n`

`$120000(1+6/100)^25 = $515024.486...`
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For monthly calculation cycle:

`$120000(1+6/(12xx100))^(12xx25) = $535796.3774....`