Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
A company currently owes $30,000 to a bank for a loan it took 6 years and 4 months ago
A company currently owes $30,000 to a bank for a loan it took 6 years and 4 months ago. The interest rate charged on the loan was 5.5% compounded monthly.
a. What was the original principal of the loan?
Round to the nearest cent
b. What was the amount of interest charged on the loan?
Expert Solution
a). Computation of the original principal of the loan:-
Here,
Rate = 5.5%/12 = 0.45833% (monthly)
n = (6*12)+4 = 76 periods (monthly)
Amount = Principal * (1+rate)^n
$30,000 = Principal * (1+0.45833%)^76
Principal = $30,000 / 1.4156
= $21,192.77 Or $21,193
b). Computation of the amount of interest charged on the loan:-
Amount of interest = Amount - Principal
= $30,000 - $21,192.77
= $8,807.23 Or $8,807
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
