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28 March, 08:49

Jack O. Lantern is interested in knowing what his son owes on his mortgage loan. If Jack knows that the interest portion of their last monthly payment was $391.42, and their interest rate is 11.5%, then what was the outstanding balance of their loan before that last payment was made?

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  1. 28 March, 09:12
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    The outstanding balance on the loan is $3,403.65

    Explanation:

    Latest interest paid = $391.42; this is 11.5% of the interest rate

    The outstanding balance is calculated as follows:

    11.5% = $391.42

    100% = ?

    Let the outstanding loan before the 11.5% interest pay be represented by unknown value y

    Therefore, cross multiply the above equations to get the following:

    100*391.42 = 11.5*y

    39,142/11.5=11.5y/11

    3,403.65 = y
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