Finance
posted by Vaness 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)

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 = PtPo = 11,65510,500 = $1155.00. 
Correct