Balloon Payments On 1 September 2012, Susan Chao bought a motorcycle for £15,000.

She paid £1,000 down and financed the balance with a 5-year loan at a stated annual interest rate of 9.6 per cent, compounded monthly. She started the monthly payments exactly one month after the purchase (i.e., 1 October 2012). Two years later, at the end of October 2014, Susan got a new job and decided to pay off the loan. If the bank charges her a 1 per cent prepayment penalty based on the loan balance, how much must she pay the bank on 1 November 2014?