Posted by **Sat** on Sunday, August 2, 2009 at 3:01am.

Payments of $1,800 and $2,400 were made on a $10,000 variable-rate loan 18 and 30 months after the date of the loan. The interest rate was 11.5% compounded semi-annually for teh first two years and 10.74% compounded monthy thereafter. What amount was owed on the loan after three years?

- Compound Interest -
**drwls**, Sunday, August 2, 2009 at 6:05am
This problem has to be solved in steps.

After 18 months (but before the first payment) the amount owed was

10,000*(1 + 0.115/2)^3 = 11,826.09

After making the first $1800 payment, the principal owed is 10,026.09. That increases by a factor 1 + 0.115/2 at 24 months, making the principal 10,602.59.

Then the interest rate goes down. After 30 months, the amount owed is

10,602.59. x (1 + 0.1074/2)

= 11,171.95

Finally, subtract the second payment from the principal and compute the increase during the last six months of the three year period.

- Compound Interest -
**Alexander**, Tuesday, July 9, 2013 at 1:08pm
A sum of £12,000 is invested for 5 years at an interest rate of 3.5% compounded annually. Calculate the value of the investment after 5 years.

## Answer this Question

## Related Questions

- Compound Interest : Future Value and Present Value - Payments of $1800 and $2400...
- compund interest - Payments of $1800 and $2400 weere made on a $10,000 variable-...
- math(simple interest) - A $9,000 loan is to be repaid in three equal payments ...
- math115 - Ms. Jefferson has been given a loan of $20,000 for 1 year. If the ...
- eco - Suppose a person pays $80 of annual interest on a loan that has a 5 ...
- Math - A 20 year loan requires semi-annual payments of $1333.28 including ...
- Loans - A borrower received a 30-year ARM mortgage loan for $120,000. Rate caps...
- Mortgage Class - A borrower received a 30-year ARM mortgage loan for $120,000. ...
- Algebra - Billy takes a $3000 loan that compounds semi-annually. He makes no ...
- buissness math - Determine the total in Dexter's account after the second month ...