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: $_________.
(Please calculate the arithmetic solution and show your work)

  1. 👍
  2. 👎
  3. 👁
  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.

    1. 👍
    2. 👎
  2. Correct

    1. 👍
    2. 👎

Respond to this Question

First Name

Your Response

Similar Questions

  1. Math

    Your bank pays 9% interest, compounded annually. Use the appropriate formula to find how much you should deposit now to yeild an annuity payment of $800 at the END of each year, for 10 years?

  2. PreCalc

    Which investment option will pay the most interest? A. 12.6% compounded annually B. 12.4% compounded semiannually C. 12.2% compounded quarterly D. 12.0% compounded continuously E. These investments all pay the same amount of

  3. Finance

    First Simple Bank pays 6 percent simple interest on its investment accounts. First Complex Bank pays interest on its accounts compounded annually. Required: What rate should the bank set if it wants to match First Simple Bank over

  4. math

    Jenny borrowed $500 for five years at 4 percent interest, compounded annually. What is the total amount she will have paid when she pays off the loan? total amount = P (1 + i)t

  1. magh

    suppose you put money into teo different bank accounts. In account #1 you deposit $500 and you will be earning 6% interest compounded quarterly. in account #2 you deposit $600 and you will be earning 5% interest compounded

  2. Math

    If 3000 dollars is invested in a bank account at an interest rate of 6 per cent per year, find the amount in the bank after 12 years if interest is compounded annually Find the amount in the bank after 12 years if interest is

  3. Calculus Please help!

    If 7000 dollars is invested in a bank account at an interest rate of 7 per cent per year. A) Find the amount in the bank after 6 years if interest is compounded annually? B) Find the amount in the bank after 6 years if interest is

  4. consumer math

    Alisha has a five-year car loan of $15,000 with an interest rate of 6 percent. If the interest is compounded annually, how much will she pay in total for her car?

  1. Finance

    First bank pays 7 percent simple interest on its investment accounts. If second bank pays interest on its accounts compounded annual, what rate should the bank set if it wants to match first bank over an investment horizon of 10

  2. Math

    If lucy borrows the money (20 000) from the bank and agrees to pay it back over four years,how much interest will she pay at an interest rate of 12 percent

  3. math

    Chandra borrows some money at 7.2%/a compounded annually. After 5 years, she repays $12 033.52 for the principal and the interest. How much money did Chandra borrow?

  4. Math

    Sara buys a washer and a dryer for $2112.She pays $500 and borrows the remaining amount. A year and a half later she pays off the loan, which compounded semi-annually, was Sara being charged.

You can view more similar questions or ask a new question.