A loan was repaid over seven years by end-of-month payments of $450. If interest was 12% compounded monthly, how much interest was paid?
Added by Edward S.
Step 1
First, we need to find the present value of the loan. To do this, we'll use the formula for the present value of an annuity: PV = PMT * [(1 - (1 + r)^(-n)) / r] where PV is the present value, PMT is the monthly payment, r is the monthly interest rate, and n is Show more…
Show all steps
Close
Your feedback will help us improve your experience
Supreeta N and 68 other Algebra educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
Vishal P.
A loan was repaid by yearly payments of $1900 for 12 years paid at the beginning of each year. Interest is 8% compounded monthly. How much interest was paid? Answer to two decimal places. Answer:
Adi S.
A $12,000 loan is to be amortized for 10 years with quarterly payments of $419.67. If the interest rate is 7%, compounded quarterly, what is the unpaid balance immediately after the sixth payment? (Round your answer to the nearest cent.)
Madhur L.
Recommended Textbooks
Elementary and Intermediate Algebra
Algebra and Trigonometry
Transcript
Watch the video solution with this free unlock.
EMAIL
PASSWORD