You have a loan for $1,000.00 at 7.65% APR. $100.00 of the loan is due each month and there is a penalty of 2% on the original amount when not paid. If you do not pay anything on the loan during the year and assuming there is no compounding, how much will you owe in total? (1 point) Responses $1,316.50 $1,316.50 $1,096.50 $1,096.50 $1,100.50 $1,100.50 $1,078.50
To calculate the total amount owed, we need to find the penalty for not paying the $100.00 per month and also include the interest for the year.
The penalty for not paying the $100.00 per month is 2% of the original amount of $1,000.00, which is $20.00.
The interest for the year is calculated as follows:
Principal amount = $1,000.00
Interest rate = 7.65%
Interest = Principal amount * Interest rate = $1,000.00 * 0.0765 = $76.50
Total amount owed = Principal amount + Penalty + Interest
Total amount owed = $1,000.00 + $20.00 + $76.50 = $1,096.50
Therefore, the correct response is $1,096.50.