Homework Help: Finance

Posted by Vaness on Friday, December 30, 2011 at 1:55am.

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 - Henry, Friday, December 30, 2011 at 3:41pm
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 - Allison Anderson, Wednesday, January 4, 2012 at 12:05pm
Correct

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