The formula to calculate the remaining balance of an existing loan is:
\[ RB = P \cdot (1 + r)^n - \left( MP \cdot \frac{(1 + r)^n - 1}{r} \right) \]
Where:
An existing loan is a financial obligation, typically in the form of a mortgage, car loan, student loan, or personal loan, that a borrower has already taken out and is in the process of repaying. The terms of the loan, including the interest rate, repayment schedule, and total amount to be repaid, are usually set at the time the loan is originated and remain in effect until the loan is fully repaid.
Let's assume the following values:
Using the formula to calculate the remaining balance:
\[ RB = 10000 \cdot (1 + 0.005)^{12} - \left( 200 \cdot \frac{(1 + 0.005)^{12} - 1}{0.005} \right) \approx 8149.67 \]
The remaining balance (RB) is approximately $8149.67.
