Post a New Question

Finance

posted by on .

Danny Joe borrows $10,500 from the bank at 11 percent annually compounded interest to be repaid in six equal annual installments. The interest paid in the first year is: $_________.
(Please calculate the arithmetic solution and show your work)

  • Finance - ,

    Pt = Po*(1+r)^n.

    r = 11%/100% = 0.11 = APR expressed as a decimal.

    n = 1 comp./yr * 1yr = 1 compounding
    period.

    Pt = $10500*(1.11)^1 = $11655.

    I = Pt-Po = 11,655-10,500 = $1155.00.

  • Finance - ,

    Correct

Answer This Question

First Name:
School Subject:
Answer:

Related Questions

More Related Questions

Post a New Question