Friday

August 1, 2014

August 1, 2014

Posted by **Annie** on Tuesday, January 10, 2012 at 6:34pm.

option 1 - borrow the money at 12%/a compounded quarterly for the full term

option 2 -Borrow the money at 12%/a compunded quarterly for 5 years and then renegotiate the loan based on the mew balance for he last 5 years

if in 5 years the interest rate wil be 6%/a compunded quarterly , how much will Serena save by choosing the second option

- Math -
**Reiny**, Tuesday, January 10, 2012 at 7:04pmoption 1

amount after 10 years = 15000(1.03)^40 = 48930.57

option 2

amount after 5 years at first rate = 15000(1.03)^20 = 27091.67

amount of that 5 years later at new rate

= 27091.67(1.015)^20 = 36488.55

take the difference

**Related Questions**

Math - Serena wants to borrow $15 000 and pay it back in 10 years. Interest ...

math - you borrow $1200 from a bank that bank charges 9.5% simple annual ...

math - Marcy is planning to borrow $12,500 with a simple interest rate of 5.2% ...

math - If you borrow $15,000 from your dad for college and you agree to pay him...

Finance - You borrow $150,000 to purchase a new house. The bank offers you a ...

math - jessica borrow$9000 from the bank to purchase a used car.the bank has ...

7th grade math - if you borrow $1000 at 9% interest and pay it back over 1 1/2 ...

uno - You decide to borrow $200,000 to build a new house. The bank charges an ...

fianance - 3. You decide to borrow $200,000 to build a new house. The bank ...

finance - 3. You decide to borrow $200,000 to build a new house. The bank ...