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You borrow $9,000 for 16 months at 8% (Q). Interest is charged for Part of a...

You borrow $9,000 for 16 months at 8% (Q). Interest is charged for Part of a Period. What do you owe at the maturity date? Round each calculation to the nearest penny (round normally)

Solutions

Expert Solution

Given that,

Amount borrowed PV = $9000

loan period = 16 months

So, number of quarter N = 16/3 = 5.33 quarters.

Interest rate r = 8% compounded quarterly.

=> Amount to be paid at maturity = PV*(1+r/n)^N = 9000*(1+0.08/4)^(16/3) = $10002.54

Amount owed at maturity = $10002.54

jeff jeffy answered 2 years ago
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