# Finance

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: \$_________.

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1. 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.

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2. 👎
2. Correct

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2. 👎

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