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A debt is amortized by monthly payments of $250. Interest is 8% compounded monthly. If the outstanding balance is $3225.68 just after a particular payment (say, the Xth payment), what was the balance just after the previous payment (i.e., the (X-1)th payment)?
Why are you attempting questions for which you do not have an answer? You should be using a Revision Kit from one of the ACCA approved publishers, they contain answers and explanations.
Also, this question could not possibly be asked in Paper PM – it is not in the syllabus for Paper PM !!!
(Add 250 to get the amount that was owing immediately before the Xth payment. Then divide by (1+r) where r is the monthly interest rate, in order to calculate how much was owing after the (X-1)th payment. This is all explained in my free Paper MA lectures – it could be asked in Paper MA!)
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