a loan of 22,823 was repaid at the end of 12 months. What size repayment check (principal and interest) was written , if a 10.7 % annual rate of interest?
To calculate the size of the repayment check for a loan, we need to consider the principal amount and the interest rate. In this case, the principal amount is $22,823 and the annual interest rate is 10.7%.
To determine the total repayment amount, we need to calculate the interest accrued over the 12-month period and add it to the principal.
Step 1: Calculate the interest accrued.
Interest = Principal * Rate * Time
Here:
Principal = $22,823
Rate = 10.7% (in decimal form, 0.107)
Time = 12 months
Interest = $22,823 * 0.107 * (12/12)
Interest = $22,823 * 0.107
Interest = $2,446.561
Step 2: Calculate the total repayment amount.
Repayment = Principal + Interest
Repayment = $22,823 + $2,446.561
Repayment = $25,269.561
Therefore, the size of the repayment check (principal and interest) is $25,269.561.