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555-605 (Medium)|   Math Related|               
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amirsalehi
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Radhika is refinancing a business loan and is considering 2 different Updated on: 12 Jun 2024, 01:46
Originally posted by amirsalehi on 23 Aug 2014, 11:09.
Last edited by Bunuel on 12 Jun 2024, 01:46, edited 10 times in total.
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Principal remaining after
12 months under Offer 1: $175,000 Principal remaining after
12 months under Offer 2: $172,700
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25% (medium)

Question Stats:

82% (02:26) correct 18% (02:50) wrong based on 1986 sessions

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Radhika is refinancing a business loan and is considering 2 different loan offers. Under Offer 1, the loan’s initial principal would be $190,000, and she would pay down $1,250 in principal with each monthly payment during the first year of the loan. Under Offer 2, $4,000 in refinancing fees would be added to bring the principal to $194,000, but she would pay down $1,775 in principal with each monthly payment during the first year of the loan.

In the first column of the table, select the amount of principal that would remain after 12 monthly payments under Offer 1. In the second column of the table, select the amount of principal that would remain after 12 monthly payments under Offer 2. Make only two selections, one in each column.­

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ID: 100322
Principal remaining after
12 months under Offer 1 		Principal remaining after
12 months under Offer 2 		Amount
$168,700
$171,000
$172,700
$175,000
$176,700
$179,000
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Principal remaining after
12 months under Offer 1: $175,000 Principal remaining after
12 months under Offer 2: $172,700
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Shrivathsan
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Radhika is refinancing a business loan and is considering 2 different 27 Jun 2016, 21:05
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wadbarzain
Radhika is refinancing a business loan and is considering 2 different loan offers. Under Offer 1, the loan's initial principal would be $190,000, and she would pay down $1,250 in principal with each monthly payment during the first year of the loan. Under Offer 2, $4,000 in refinancing fees would be added to bring the principal to $194,000, but she would pay down $1,775 in principal with each monthly payment during the first year.

In the first column of the table, select the amount of principal that would remain after 12 monthly payments under Offer 1. In the second column of the table, select the amount of principal that would remain after 12 monthly payments under Offer 2. Make only two selections, one in each column.

$168,700
$171,000
$172,700
$175,000
$176,700
$179,000


Show Spoiler
Offer 1: $175,000 Offer 2: $172,700
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Pretty simple Q.
Offer 1 :
P=1250 ; months : 12 ; amount to repay : 190000
amount remain after 12 months.
190000-(12*1250) = 175000

Offer 2 :
P=1775; months : 12 ; amount to repay : 194000
amount remain after 12 months.
194000-(12*1775) = 172700

--------------------------------
Shrivathsan
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marciful
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Radhika is refinancing a business loan and is considering 2 different 24 Aug 2014, 09:53
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amirsalehi
Hi there,
Can anyone help me with this IR question?
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Offer 1 Offer 2
190,000 Principal 194,000
1,250 Monthly Principal Payments 1,775
15,000 Total Principal Payments after Year 1 21,300
175,000 Principal remaining after Year 1 172,700
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Apt0810
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Radhika is refinancing a business loan and is considering 2 different 19 Oct 2019, 09:41
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Option 1: Amount remaining after 1 year = 190000-(12*1250) = 175000

Option 2:Amount remaining after 1 year = 194000-(12*1775) = 172700

Posted from my mobile device
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TheNightKing
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Radhika is refinancing a business loan and is considering 2 different 19 Oct 2019, 16:38
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Quote:

Radhika is refinancing a business loan and is considering 2 different loan offers. Under Offer 1, the loan's initial principal would be $190,000, and she would pay down $1,250 in principal with each monthly payment during the first year of the loan. Under Offer 2, $4,000 in refinancing fees would be added to bring the principal to $194,000, but she would pay down $1,775 in principal with each monthly payment during the first year.

In the first column of the table, select the amount of principal that would remain after 12 monthly payments under Offer 1. In the second column of the table, select the amount of principal that would remain after 12 monthly payments under Offer 2. Make only two selections, one in each column.

A. $168,700
B. $171,000
C. $172,700
D. $175,000
E. $176,700
F. $179,000
Show more

Offer 1 :
Principal Amount = 1,90,000
Per Month = 1250
12 Months = 12*1250=12500+2500=15000
Balance = 190000-15000 = 175000

Offer 2 :
Principal Amount = 1,94,000
Per Month = 1775
12 Months = 12*1775=17750+3550=21,300
Balance = 194000-21300 = 1,72,700

So Option D and option C.
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ishitaz
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Radhika is refinancing a business loan and is considering 2 different 08 Nov 2020, 04:14
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Hi, one doubt. Why didn't we include refinance fees in the principal as mentioned in the question for Offer2?
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Ansh13
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Radhika is refinancing a business loan and is considering 2 different 10 Nov 2020, 12:46
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ishitaz
Hi, one doubt. Why didn't we include refinance fees in the principal as mentioned in the question for Offer2?
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ishitaz - The refinance fees is already added in the principal in Offer 2. The principal amount of $194,000 in Offer 2 is inclusive of the $4000 refinancing fees. The questions says -
Quote:
....Under Offer 2, $4,000 in refinancing fees would be added to bring the principal to $194,000, but she would....
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This means that the $4000 refinancing fees when added to the principal, brings the total value of principal to $194,000.

Hope that clears your doubt.
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scranjith
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Radhika is refinancing a business loan and is considering 2 different 04 Mar 2021, 09:03
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Offer 1: Amount remaining after 1 year = 190000-(12*1250) = 175000

Offer 2: Amount remaining after 1 year = 194000-4000-(12*1775) = 168700

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Radhika is refinancing a business loan and is considering 2 different 15 Jun 2025, 09:26
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Do you have any suggestions on how to reduce the time spent here? I can solve questions like this, but it's taking me around 3-4 minutes. The most significant part of the time is spent on comprehension.
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cheshire
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Radhika is refinancing a business loan and is considering 2 different 27 Jun 2025, 16:31
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If your struggling with comprehension i would recommend when reading the prompt, don’t aim to absorb every detail at once.

In this instance focus on these in your first pass:

-Initial Values - "The loans initial principal would be"

-Monthly Changes - "...she would pay down $X in principal with each monthly payment..."

-Extra conditions or agreements - "...$4,000 in refinancing fees would be added..."


After this, jot down simple variables (e.g., O1: 190k, -1250/mo; O2: 190k+4k, -1775/mo)
This helps lock in the structure of the question before getting distracted by options.


Also, memorize formulas so you can more quickly get into the math. In this case: Remaining=Initial principal−(monthly payment×12)
While it might seem simple to figure them out on a question by question basis, remembering them can streamline the solving process.
surya4
Do you have any suggestions on how to reduce the time spent here? I can solve questions like this, but it's taking me around 3-4 minutes. The most significant part of the time is spent on comprehension.
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